Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | Apr. 20, 2016 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
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 | 22,321,564 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | ||
Income Statement [Abstract] | |||
Net Sales | $ 445,897 | $ 460,451 | |
Cost of Sales | 352,398 | 384,009 | |
Gross Profit | 93,499 | 76,442 | |
Operating Expenses: | |||
Selling | 13,690 | 12,997 | |
Administrative | [1] | 18,700 | 17,762 |
Research, development and technical services | 13,782 | 11,790 | |
Deferred compensation expense | [1] | 2,720 | 1,577 |
Total Operating expenses | 48,892 | 44,126 | |
Gain on sale of product line | 2,862 | ||
Operating Income | 44,607 | 35,178 | |
Other Income (Expense): | |||
Interest, net | (3,614) | (4,054) | |
Loss from equity in joint ventures (Note 15) | (1,240) | ||
Other, net (Note 13) | (525) | 652 | |
Nonoperating Income (Expense), Total | (4,139) | (4,642) | |
Income Before Provision for Income Taxes | 40,468 | 30,536 | |
Provision for Income Taxes | 12,811 | 9,250 | |
Net Income | 27,657 | 21,286 | |
Net Income Attributable to Noncontrolling Interests (Note 2) | (3) | (16) | |
Net Income Attributable to Stepan Company | $ 27,654 | $ 21,270 | |
Net Income Per Common Share Attributable to Stepan Company (Note 9): | |||
Basic | $ 1.22 | $ 0.94 | |
Diluted | $ 1.21 | $ 0.93 | |
Shares Used to Compute Net Income Per Common Share Attributable to Stepan Company (Note 9): | |||
Basic | 22,733 | 22,718 | |
Diluted | 22,882 | 22,827 | |
Dividends Declared Per Common Share | $ 0.19 | $ 0.18 | |
[1] | In the first quarter of 2015, deferred compensation expense was included in administrative expenses. The 2015 amounts have been classified separately to conform to the current year presentation |
Condensed Consolidated Stateme3
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Net income | $ 27,657 | $ 21,286 |
Other comprehensive income (loss): | ||
Foreign currency translation adjustments (Note 10) | 12,590 | (25,152) |
Defined benefit pension adjustments, net of tax (Note 10) | 564 | 749 |
Derivative instrument activity, net of tax (Note 10) | (21) | (42) |
Total other comprehensive income (loss) | 13,133 | (24,445) |
Comprehensive income (loss) | 40,790 | (3,159) |
Comprehensive income attributable to noncontrolling interests (Note 2) | (14) | (1) |
Comprehensive income (loss) attributable to Stepan Company | $ 40,776 | $ (3,160) |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Current Assets: | ||
Cash and cash equivalents | $ 145,669 | $ 176,143 |
Receivables, net | 291,635 | 249,602 |
Inventories (Note 6) | 177,787 | 170,424 |
Other current assets | 24,035 | 23,404 |
Total current assets | 639,126 | 619,573 |
Property, Plant and Equipment: | ||
Cost | 1,469,307 | 1,446,098 |
Less: accumulated depreciation | (910,590) | (890,635) |
Property, plant and equipment, net | 558,717 | 555,463 |
Goodwill, net | 11,366 | 11,265 |
Other intangible assets, net | 17,272 | 17,957 |
Long-term investments (Note 3) | 20,787 | 20,910 |
Other non-current assets (Note 16) | 12,689 | 13,224 |
Total assets | 1,259,957 | 1,238,392 |
Current Liabilities: | ||
Current maturities of long-term debt (Note 12) | 15,277 | 18,806 |
Accounts payable | 129,963 | 128,605 |
Accrued liabilities | 76,109 | 95,833 |
Total current liabilities | 221,349 | 243,244 |
Deferred income taxes | 11,828 | 9,455 |
Long-term debt, less current maturities (Notes 12 and 16) | 312,573 | 312,548 |
Other non-current liabilities | $ 117,964 | $ 114,761 |
Commitments and Contingencies (Note 7) | ||
Equity: | ||
Common stock, $1 par value; authorized 60,000,000 shares; Issued 25,733,795 shares in 2016 and 25,709,391 shares in 2015 | $ 25,734 | $ 25,709 |
Additional paid-in capital | 146,874 | 144,601 |
Accumulated other comprehensive loss (Note 10) | (111,966) | (125,088) |
Retained earnings | 603,625 | 580,208 |
Less: Common treasury stock, at cost,3,444,231 shares in 2016 and 3,428,541 shares in 2015 | (69,438) | (68,446) |
Total Stepan Company stockholders’ equity | 594,829 | 556,984 |
Noncontrolling interests (Note 2) | 1,414 | 1,400 |
Total equity | 596,243 | 558,384 |
Total liabilities and equity | $ 1,259,957 | $ 1,238,392 |
Condensed Consolidated Balance5
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2016 | Dec. 31, 2015 |
Statement Of Financial Position [Abstract] | ||
Common stock, par value | $ 1 | $ 1 |
Common stock, shares authorized | 60,000,000 | 60,000,000 |
Common stock, shares issued | 25,733,795 | 25,709,391 |
Treasury stock, shares | 3,444,231 | 3,428,541 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | ||
Cash Flows From Operating Activities | |||
Net income | $ 27,657 | $ 21,286 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 18,070 | 16,127 | |
Deferred compensation | [1] | 2,720 | 1,577 |
Realized and unrealized (gains) losses on long-term investments | 306 | (531) | |
Stock-based compensation | 2,423 | 798 | |
Deferred income taxes | 2,683 | (1,261) | |
Other non-cash items | 282 | (1,397) | |
Changes in assets and liabilities: | |||
Receivables, net | (36,263) | (11,546) | |
Inventories | (5,274) | 4,969 | |
Other current assets | (315) | (1,703) | |
Accounts payable and accrued liabilities | (14,846) | 5,647 | |
Pension liabilities | 156 | 111 | |
Environmental and legal liabilities | 837 | 90 | |
Deferred revenues | (282) | (195) | |
Excess tax benefit from stock options and awards | (262) | (120) | |
Net Cash (Used In) Provided By Operating Activities | (2,108) | 33,852 | |
Cash Flows From Investing Activities | |||
Expenditures for property, plant and equipment | (19,340) | (28,295) | |
Proceeds from sale of product line (Note14) | 3,262 | ||
Other, net | (3,119) | (73) | |
Net Cash Used In Investing Activities | (22,459) | (25,106) | |
Cash Flows From Financing Activities | |||
Revolving debt and bank overdrafts, net | (3,588) | 14,241 | |
Other debt repayments | (159) | (2,063) | |
Dividends paid | (4,237) | (4,047) | |
Company stock repurchased | (908) | ||
Stock option exercises | 258 | 167 | |
Excess tax benefit from stock options and awards | 262 | 120 | |
Other, net | (235) | (275) | |
Net Cash (Used In) Provided By Financing Activities | (8,607) | 8,143 | |
Effect of Exchange Rate Changes on Cash | 2,700 | (4,796) | |
Net Increase (Decrease) in Cash and Cash Equivalents | (30,474) | 12,093 | |
Cash and Cash Equivalents at Beginning of Period | 176,143 | 85,215 | |
Cash and Cash Equivalents at End of Period | 145,669 | 97,308 | |
Supplemental Cash Flow Information | |||
Cash (refunds) of income taxes, net of payments | (733) | (2,920) | |
Cash payments of interest | $ 2,124 | $ 435 | |
[1] | In the first quarter of 2015, deferred compensation expense was included in administrative expenses. The 2015 amounts have been classified separately to conform to the current year presentation |
Condensed Consolidated Financia
Condensed Consolidated Financial Statements | 3 Months Ended |
Mar. 31, 2016 | |
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 (U.S. 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 March 31, 2016, and its results of operations for the three months ended March 31, 2016 and 2015, and cash flows for the three months ended March 31, 2016 and 2015, 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 2015 Form 10-K. |
Reconciliations of Equity
Reconciliations of Equity | 3 Months Ended |
Mar. 31, 2016 | |
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 three months ended March 31, 2016 and 2015: (In thousands) Total Equity Stepan Company Equity Noncontrolling Interests’ Equity (3) Balance at January 1, 2016 $ 558,384 $ 556,984 $ 1,400 Net income 27,657 27,654 3 Dividends (4,237 ) (4,237 ) — Common stock purchases (1) (1,143 ) (1,143 ) — Stock option exercises 258 258 — Defined benefit pension adjustments, net of tax 564 564 — Translation adjustments 12,590 12,579 11 Derivative instrument activity, net of tax (21 ) (21 ) — Other (2) 2,191 2,191 — Balance at March 31, 2016 $ 596,243 $ 594,829 $ 1,414 (In thousands) Total Equity Stepan Company Equity Noncontrolling Interests’ Equity (3) Balance at January 1, 2015 $ 536,944 $ 535,546 $ 1,398 Net income 21,286 21,270 16 Dividends (4,047 ) (4,047 ) — Common stock purchases (1) (273 ) (273 ) — Stock option exercises 167 167 — Defined benefit pension adjustments, net of tax 749 749 — Translation adjustments (25,152 ) (25,137 ) (15 ) Derivative instrument activity, net of tax (42 ) (42 ) — Other (2) 846 846 — Balance at March 31, 2015 $ 530,478 $ 529,079 $ 1,399 (1) (2) (3) |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 3. FAIR VALUE MEASUREMENTS The following were the financial instruments held by the Company at March 31, 2016, and December 31, 2015, and the methods and assumptions used to estimate the instruments’ fair values: Cash and cash equivalents Carrying value approximated fair value because of the short maturity of the instruments. Derivative assets and liabilities Derivative assets and liabilities included 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 included the mutual fund assets the Company held 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 8). Fair value and carrying value were the same because the mutual fund assets were recorded at fair value in accordance with the FASB’s fair value option rules. 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 within level 2 of the fair value hierarchy. At March 31, 2016, and December 31, 2015, the fair values and related carrying values of debt, including current maturities, were as follows (the fair value and carrying value amounts are shown without regard to unamortized issuance costs): (In thousands) March 31, 2016 December 31, 2015 Fair value $ 337,472 $ 331,183 Carrying value 329,081 332,623 The following tables present financial assets and liabilities measured on a recurring basis at fair value as of March 31, 2016, and December 31, 2015, and the level within the fair value hierarchy in which the fair value measurements fall: (In thousands) March 2016 Level 1 Level 2 Level 3 Mutual fund assets $ 20,787 $ 20,787 $ — $ — Derivative assets: Foreign currency contracts 582 — 582 — Total assets at fair value $ 21,369 $ 20,787 $ 582 $ — Derivative liabilities: Foreign currency contracts $ 95 $ — $ 95 $ — Interest rate contracts 81 — 81 — Total liabilities at fair value $ 176 $ — $ 176 $ — (In thousands) December 2015 Level 1 Level 2 Level 3 Mutual fund assets $ 20,910 $ 20,910 $ — $ — Derivative assets: Foreign currency contracts 112 — 112 — Total assets at fair value $ 21,022 $ 20,910 $ 112 $ — Derivative liabilities : Foreign currency contracts $ 305 $ — $ 305 $ — Interest rate contracts 53 — 53 — Total liabilities at fair value $ 358 $ — $ 358 $ — |
Derivative Instruments
Derivative Instruments | 3 Months Ended |
Mar. 31, 2016 | |
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 March 31, 2016, and December 31, 2015, the Company had open forward foreign currency exchange contracts, all with settlement dates of about one month, to buy or sell foreign currencies with U.S. dollar equivalent amounts of $29,703,000 and $31,194,000, 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 interest rate swap contracts with notional values of $3,740,000 at March 31, 2016, and $3,724,000 and December 31, 2015. The contracts were designated as cash flow hedges. Period-to-period changes in the fair values 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 March 31, 2016, and December 31, 2015, and derivative instrument gains and losses for the three-month periods ended March 31, 2016 and 2015, were immaterial. For amounts reclassified out of AOCI into earnings for the three-month periods ended March 31, 2016 and 2015, see Note 10. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2016 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation | 5. STOCK-BASED COMPENSATION On March 31, 2016, the Company had 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 March 31 2016 2015 $ 2,423 $ 798 The year-over-year increase in stock-based compensation expense was primarily attributable to increases in compensation related to cash-settled SARs and performance awards. SARs compensation expense increased due to increases in the fair values of cash-settled SARs that resulted from higher quarter-over-quarter appreciation in the value of Company common stock. Performance award stock-based compensation expense was up between years as the result of management’s assessment that the profitability performance metrics for certain grants would be achieved at greater levels than previously estimated. Unrecognized compensation costs for stock options, stock awards and SARs were as follows: (In thousands) March 31, 2016 December 31, 2015 Stock options $ 1,839 $ 784 Stock awards 6,545 3,396 SARs 4,048 1,644 The increases in unrecognized compensation costs for stock options, stock awards and SARs reflected the 2016 grants of: Shares Stock options 99,730 Stock awards (at target) 72,997 SARs 218,660 The unrecognized compensation costs at March 31, 2016, are expected to be recognized over weighted-average periods of 1.6 years, 2.3 years and 1.6 years for stock options, stock awards and SARs, respectively. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories | 6. INVENTORIES The composition of inventories at March 31, 2016, and December 31, 2015, was as follows: (In thousands) March 31, 2016 December 31, 2015 Finished goods $ 127,698 $ 124,481 Raw materials 50,089 45,943 Total inventories $ 177,787 $ 170,424 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 $20,723,000 and $18,171,000 higher than reported at March 31, 2016, and December 31, 2015, respectively. |
Contingencies
Contingencies | 3 Months Ended |
Mar. 31, 2016 | |
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 March 31, 2016, the Company estimated a range of possible environmental and legal losses of $21.8 million to $42.4 million. At March 31, 2016, and December 31, 2015, 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 $21.8 million and $20.9 million, respectively. Cash outlays related to legal and environmental matters approximated $0.3 million for each of the three-month periods ended March 31, 2016 and 2015. 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 March 31, 2016: 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. USEPA has not yet issued a ROD for chemically-contaminated groundwater for the Maywood site. Based on the most current information available, 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 $2.4 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. Mexico Value-Added Tax In the first quarter of 2015, 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. No exposure for years after 2014 exists as the Company remedied the underlying issue that led to the tax authorities’ determination. In February 2016, the Company reached agreement with Mexico’s tax authorities on the amount of inflation, penalty and interest charged for the 2009 and 2010 years under audit. No significant adjustments were required to the previously recorded liability. Depending on the outcomes of future negotiations with Mexico’s tax authorities regarding the years 2011- 2014 and the actual amount of the past VAT that is recovered by the Company, the final actual settlement could differ from the current recorded liability. |
Postretirement Benefit Plans
Postretirement Benefit Plans | 3 Months Ended |
Mar. 31, 2016 | |
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 UNITED KINGDOM (In thousands) Three Months Ended March 31 Three Months Ended March 31 2016 2015 2016 2015 Interest cost $ 1,729 $ 1,701 $ 193 $ 195 Expected return on plan assets (2,254 ) (2,393 ) (238 ) (262 ) Amortization of net actuarial loss 882 1,149 20 45 Net periodic benefit cost $ 357 $ 457 $ (25 ) $ (22 ) 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 2016 contributions to the funded U.S. qualified defined benefit plans. Approximately $178,000 is expected to be paid related to the unfunded non-qualified plans. As of March 31, 2016, $110,000 had been paid related to the non-qualified plans. U.K. Plan The Company’s United Kingdom subsidiary expects to contribute approximately $361,000 to its defined benefit pension plan in 2016. As of March 31, 2016, $88,000 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 March 31 2016 2015 Retirement savings plans $ 1,291 $ 1,184 Profit sharing plan 1,717 980 Total defined contribution expense $ 3,008 $ 2,164 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 March 31, 2016, the balance of the trust assets was $1,815,000, 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 | 3 Months Ended |
Mar. 31, 2016 | |
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 months ended March 31, 2016 and 2015: (In thousands, except per share amounts) Three Months Ended March 31 2016 2015 Computation of Basic Earnings per Share Net income attributable to Stepan Company $ 27,654 $ 21,270 Weighted-average number of common shares outstanding 22,733 22,718 Basic earnings per share $ 1.22 $ 0.94 Computation of Diluted Earnings per Share Net income attributable to Stepan Company $ 27,654 $ 21,270 Weighted-average number of shares outstanding 22,733 22,718 Add weighted-average net shares from assumed exercise of options (under treasury stock method) (1) 113 104 Add weighted-average net shares related to unvested stock awards (under treasury stock method) 4 5 Add weighted-average net shares from assumed exercise of SARs (under treasury stock method) 8 — Add weighted-average contingently issuable net shares related to performance stock awards (under treasury stock method) 24 — Weighted-average shares applicable to diluted earnings 22,882 22,827 Diluted earnings per share $ 1.21 $ 0.93 (1) |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 3 Months Ended |
Mar. 31, 2016 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | 10. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) Below is the change in the Company’s accumulated other comprehensive income (loss) (AOCI) balance by component (net of income taxes) for the three months ended March 31, 2016 and 2015: (In thousands) Foreign Currency Translation Adjustments Defined Benefit Pension Plan Adjustments Cash Flow Hedge Adjustments Total Balance at December 31, 2014 $ (42,914 ) $ (41,149 ) $ 118 $ (83,945 ) Other comprehensive income before reclassifications (25,137 ) — (43 ) (25,180 ) Amounts reclassified from AOCI — 749 1 750 Net current-period other comprehensive income (25,137 ) 749 (42 ) (24,430 ) Balance at March 31, 2015 $ (68,051 ) $ (40,400 ) $ 76 $ (108,375 ) Balance at December 31, 2015 $ (88,337 ) $ (36,825 ) $ 74 $ (125,088 ) Other comprehensive income before reclassifications 12,579 — (23 ) 12,556 Amounts reclassified from AOCI — 564 2 566 Net current-period other comprehensive income 12,579 564 (21 ) 13,122 Balance at March 31, 2016 $ (75,758 ) $ (36,261 ) $ 53 $ (111,966 ) Information regarding the reclassifications out of AOCI for the three month periods ended March 31, 2016 and 2015, is displayed below: (In thousands) Amount Reclassified from AOCI (a) AOCI Components Three Months Ended March 31 Affected Line Item in Consolidated Statements of Income 2016 2015 Amortization of defined benefit pension actuarial losses $ (902 ) $ (1,194 ) (b) 338 445 Tax benefit $ (564 ) $ (749 ) Net of tax Gains and losses on cash flow hedges: Interest rate contracts $ (6 ) $ (5 ) Interest, net Foreign exchange contracts 2 2 Cost of sales (4 ) (3 ) Total before tax 2 2 Tax benefit $ (2 ) $ (1 ) Net of tax Total reclassifications for the period $ (566 ) $ (750 ) 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 | 3 Months Ended |
Mar. 31, 2016 | |
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 months ended March 31, 2016 and 2015, were as follows: (In thousands) Three Months Ended March 31 2016 2015 Segment Net Sales Surfactants $ 309,960 $ 330,551 Polymers 113,898 109,364 Specialty Products 22,039 20,536 Total $ 445,897 $ 460,451 Segment operating income and reconciliations of segment operating income to consolidated income before income taxes for the three months ended March 31, 2016 and 2015, are summarized below: (In thousands) Three Months Ended March 31 2016 2015 Segment Operating Income Surfactants $ 37,245 $ 33,764 Polymers 22,197 14,785 Specialty Products 2,333 2,244 Segment operating income 61,775 50,793 Unallocated corporate expenses (1) (17,168 ) (15,615 ) Consolidated operating income 44,607 35,178 Interest expense, net (3,614 ) (4,054 ) Loss from equity in joint ventures — (1,240 ) Other, net (525 ) 652 Consolidated income before income taxes $ 40,468 $ 30,536 (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 | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Debt | 12. DEBT At March 31, 2016, and December 31, 2015, debt comprised the following: (In thousands) Maturity Dates March 31, 2016 December 31, 2015 (1) Unsecured private placement notes 3.95% (net of unamortized debt issuance cost of $374 and $383 for 2016 and 2015, respectively) 2021-2027 $ 99,626 $ 99,617 3.86% (net of unamortized debt issuance cost of $428 and $440 for 2016 and 2015, respectively) 2019-2025 99,572 99,560 4.86% (net of unamortized debt issuance cost of $252 and $260 for 2016 and 2015, respectively) 2017-2023 64,748 64,740 5.88% (net of unamortized debt issuance cost of $135 and $140 for 2016 and 2015, respectively) 2016-2022 39,865 39,860 5.69% (net of unamortized debt issuance cost of $42 and $46 for 2016 and 2015, respectively) 2016-2018 17,100 17,096 Unsecured U.S. bank debt 2019 — — Debt of foreign subsidiaries Unsecured bank debt, foreign currency 2016 59 4,810 Unsecured bank term loan, foreign currency 2021 3,740 3,724 Secured bank debt, foreign currency 2015 3,140 1,947 Total debt $ 327,850 $ 331,354 Less current maturities 15,277 18,806 Long-term debt $ 312,573 $ 312,548 (1) Certain balances have been restated from those originally reported at December 31, 2015, due to the Company’s January 1, 2016, adoption of the new U.S. GAAP guidance regarding the classification of debt issuance costs. See Note 16 for additional information regarding ASU No. 2015-03. The Company has a committed $125,000,000 multi-currency revolving credit agreement that expires on July 10, 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 March 31, 2016, the Company had outstanding letters of credit totaling $4,927,000 and no outstanding debt under this agreement. There was $120,073,000 available under the revolving credit agreement as of March 31, 2016. 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 $132,546,000 and $119,891,000 at March 31, 2016 and December 31, 2015, respectively. Net debt (which is defined as total debt minus cash) was $182,181,000 at March 31, 2016, compared to $155,211,000 at December 31, 2015. |
Other, Net
Other, Net | 3 Months Ended |
Mar. 31, 2016 | |
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 March 31 2016 2015 Foreign exchange losses $ (311 ) $ (2 ) Investment income 92 123 Realized and unrealized gains (losses) on investments (306 ) 531 Other, net $ (525 ) $ 652 |
Sale of Product Line
Sale of Product Line | 3 Months Ended |
Mar. 31, 2016 | |
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. The sale of kits included inventory, 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, Company operating income for the three months ended March 31, 2015, included a gain of $2,862,000. 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. |
TIORCO, LLC Joint Venture
TIORCO, LLC Joint Venture | 3 Months Ended |
Mar. 31, 2016 | |
Equity Method Investments And Joint Ventures [Abstract] | |
TIORCO, LLC Joint Venture | 15 . TIORCO, LLC JOINT VENTURE In October 2015, the Company and its partner, Nalco Company (a subsidiary of Ecolab Inc.), made the decision to dissolve their equally owned and operated TIORCO, LLC (TIORCO) enhanced oil recovery joint venture. As a result of the dissolution, TIORCO incurred fourth quarter 2015 exit costs, for which the Company recorded its share in the three- and twelve-month periods ended December 31, 2015. The Company made a final cash investment of $2,900,000 to TIORCO during the three-month period ended March 31, 2016, to fund the exit costs and other final cash requirements for dissolving the joint venture. The additional funding did not materially differ from the exit costs recorded as of December 31, 2015. Legal dissolution of TIORCO is finalized, and no further significant costs or expenditures related to the joint venture are expected to be incurred. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Changes And Error Corrections [Abstract] | |
Recent Accounting Pronouncements | 1 6 . RECENT ACCOUNTING PRONOUNCEMENTS In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606) Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date 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 August 2015, the FASB issued ASU No. 2015-15, Interest—Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements—Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting (SEC Update which) 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 In July 2015, the FASB issued ASU No. 2015-11, Inventory (Topic 330), Simplifying the Measurement of Inventory, In September 2015, the FASB issued ASU No. 2015-16, Business Combinations (Topic 805), Simplifying the Accounting for Measurement-Period Adjustments In February 2016, the FASB issued ASU No. 2016-2, Leases (Topic 842) In March 2016, the FASB issued ASU No. 2016-9, Compensation – Stock Compensation (Topic 718) Improvements to Employee Share-Based Payment Accounting. |
Recent Accounting Pronounceme23
Recent Accounting Pronouncements (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Changes And Error Corrections [Abstract] | |
Recent Accounting Pronouncements | In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606) Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date 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 August 2015, the FASB issued ASU No. 2015-15, Interest—Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements—Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting (SEC Update which) 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 In July 2015, the FASB issued ASU No. 2015-11, Inventory (Topic 330), Simplifying the Measurement of Inventory, In September 2015, the FASB issued ASU No. 2015-16, Business Combinations (Topic 805), Simplifying the Accounting for Measurement-Period Adjustments In February 2016, the FASB issued ASU No. 2016-2, Leases (Topic 842) In March 2016, the FASB issued ASU No. 2016-9, Compensation – Stock Compensation (Topic 718) Improvements to Employee Share-Based Payment Accounting. |
Reconciliations of Equity (Tabl
Reconciliations of Equity (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Equity [Abstract] | |
Reconciliations of Total Equity | Below are reconciliations of total equity, Company equity and equity attributable to noncontrolling interests for the three months ended March 31, 2016 and 2015: (In thousands) Total Equity Stepan Company Equity Noncontrolling Interests’ Equity (3) Balance at January 1, 2016 $ 558,384 $ 556,984 $ 1,400 Net income 27,657 27,654 3 Dividends (4,237 ) (4,237 ) — Common stock purchases (1) (1,143 ) (1,143 ) — Stock option exercises 258 258 — Defined benefit pension adjustments, net of tax 564 564 — Translation adjustments 12,590 12,579 11 Derivative instrument activity, net of tax (21 ) (21 ) — Other (2) 2,191 2,191 — Balance at March 31, 2016 $ 596,243 $ 594,829 $ 1,414 (In thousands) Total Equity Stepan Company Equity Noncontrolling Interests’ Equity (3) Balance at January 1, 2015 $ 536,944 $ 535,546 $ 1,398 Net income 21,286 21,270 16 Dividends (4,047 ) (4,047 ) — Common stock purchases (1) (273 ) (273 ) — Stock option exercises 167 167 — Defined benefit pension adjustments, net of tax 749 749 — Translation adjustments (25,152 ) (25,137 ) (15 ) Derivative instrument activity, net of tax (42 ) (42 ) — Other (2) 846 846 — Balance at March 31, 2015 $ 530,478 $ 529,079 $ 1,399 (1) (2) (3) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Values and Related Carrying Values of Debt | At March 31, 2016, and December 31, 2015, the fair values and related carrying values of debt, including current maturities, were as follows (the fair value and carrying value amounts are shown without regard to unamortized issuance costs): (In thousands) March 31, 2016 December 31, 2015 Fair value $ 337,472 $ 331,183 Carrying value 329,081 332,623 |
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 March 31, 2016, and December 31, 2015, and the level within the fair value hierarchy in which the fair value measurements fall: (In thousands) March 2016 Level 1 Level 2 Level 3 Mutual fund assets $ 20,787 $ 20,787 $ — $ — Derivative assets: Foreign currency contracts 582 — 582 — Total assets at fair value $ 21,369 $ 20,787 $ 582 $ — Derivative liabilities: Foreign currency contracts $ 95 $ — $ 95 $ — Interest rate contracts 81 — 81 — Total liabilities at fair value $ 176 $ — $ 176 $ — (In thousands) December 2015 Level 1 Level 2 Level 3 Mutual fund assets $ 20,910 $ 20,910 $ — $ — Derivative assets: Foreign currency contracts 112 — 112 — Total assets at fair value $ 21,022 $ 20,910 $ 112 $ — Derivative liabilities : Foreign currency contracts $ 305 $ — $ 305 $ — Interest rate contracts 53 — 53 — Total liabilities at fair value $ 358 $ — $ 358 $ — |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Compensation Expense (Income) 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 March 31 2016 2015 $ 2,423 $ 798 |
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) March 31, 2016 December 31, 2015 Stock options $ 1,839 $ 784 Stock awards 6,545 3,396 SARs 4,048 1,644 |
Share Based Payment Awards Granted in Period | The increases in unrecognized compensation costs for stock options, stock awards and SARs reflected the 2016 grants of: Shares Stock options 99,730 Stock awards (at target) 72,997 SARs 218,660 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Composition of Inventories | The composition of inventories at March 31, 2016, and December 31, 2015, was as follows: (In thousands) March 31, 2016 December 31, 2015 Finished goods $ 127,698 $ 124,481 Raw materials 50,089 45,943 Total inventories $ 177,787 $ 170,424 |
Postretirement Benefit Plans (T
Postretirement Benefit Plans (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Compensation And Retirement Disclosure [Abstract] | |
Components of Net Periodic Benefit Cost | Components of Net Periodic Benefit Cost UNITED STATES UNITED KINGDOM (In thousands) Three Months Ended March 31 Three Months Ended March 31 2016 2015 2016 2015 Interest cost $ 1,729 $ 1,701 $ 193 $ 195 Expected return on plan assets (2,254 ) (2,393 ) (238 ) (262 ) Amortization of net actuarial loss 882 1,149 20 45 Net periodic benefit cost $ 357 $ 457 $ (25 ) $ (22 ) |
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 March 31 2016 2015 Retirement savings plans $ 1,291 $ 1,184 Profit sharing plan 1,717 980 Total defined contribution expense $ 3,008 $ 2,164 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
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 months ended March 31, 2016 and 2015: (In thousands, except per share amounts) Three Months Ended March 31 2016 2015 Computation of Basic Earnings per Share Net income attributable to Stepan Company $ 27,654 $ 21,270 Weighted-average number of common shares outstanding 22,733 22,718 Basic earnings per share $ 1.22 $ 0.94 Computation of Diluted Earnings per Share Net income attributable to Stepan Company $ 27,654 $ 21,270 Weighted-average number of shares outstanding 22,733 22,718 Add weighted-average net shares from assumed exercise of options (under treasury stock method) (1) 113 104 Add weighted-average net shares related to unvested stock awards (under treasury stock method) 4 5 Add weighted-average net shares from assumed exercise of SARs (under treasury stock method) 8 — Add weighted-average contingently issuable net shares related to performance stock awards (under treasury stock method) 24 — Weighted-average shares applicable to diluted earnings 22,882 22,827 Diluted earnings per share $ 1.21 $ 0.93 (1) |
Accumulated Other Comprehensi30
Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Equity [Abstract] | |
Summary of Changes in Accumulated Other Comprehensive Income (Loss) | Below is the change in the Company’s accumulated other comprehensive income (loss) (AOCI) balance by component (net of income taxes) for the three months ended March 31, 2016 and 2015: (In thousands) Foreign Currency Translation Adjustments Defined Benefit Pension Plan Adjustments Cash Flow Hedge Adjustments Total Balance at December 31, 2014 $ (42,914 ) $ (41,149 ) $ 118 $ (83,945 ) Other comprehensive income before reclassifications (25,137 ) — (43 ) (25,180 ) Amounts reclassified from AOCI — 749 1 750 Net current-period other comprehensive income (25,137 ) 749 (42 ) (24,430 ) Balance at March 31, 2015 $ (68,051 ) $ (40,400 ) $ 76 $ (108,375 ) Balance at December 31, 2015 $ (88,337 ) $ (36,825 ) $ 74 $ (125,088 ) Other comprehensive income before reclassifications 12,579 — (23 ) 12,556 Amounts reclassified from AOCI — 564 2 566 Net current-period other comprehensive income 12,579 564 (21 ) 13,122 Balance at March 31, 2016 $ (75,758 ) $ (36,261 ) $ 53 $ (111,966 ) |
Summary of Reclassifications Out of Accumulated Other Comprehensive Income | Information regarding the reclassifications out of AOCI for the three month periods ended March 31, 2016 and 2015, is displayed below: (In thousands) Amount Reclassified from AOCI (a) AOCI Components Three Months Ended March 31 Affected Line Item in Consolidated Statements of Income 2016 2015 Amortization of defined benefit pension actuarial losses $ (902 ) $ (1,194 ) (b) 338 445 Tax benefit $ (564 ) $ (749 ) Net of tax Gains and losses on cash flow hedges: Interest rate contracts $ (6 ) $ (5 ) Interest, net Foreign exchange contracts 2 2 Cost of sales (4 ) (3 ) Total before tax 2 2 Tax benefit $ (2 ) $ (1 ) Net of tax Total reclassifications for the period $ (566 ) $ (750 ) 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) | 3 Months Ended |
Mar. 31, 2016 | |
Segment Reporting [Abstract] | |
Operating Segment | The Company has three reportable segments: Surfactants, Polymers and Specialty Products. Net sales by segment for the three months ended March 31, 2016 and 2015, were as follows: (In thousands) Three Months Ended March 31 2016 2015 Segment Net Sales Surfactants $ 309,960 $ 330,551 Polymers 113,898 109,364 Specialty Products 22,039 20,536 Total $ 445,897 $ 460,451 |
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 ended March 31, 2016 and 2015, are summarized below: (In thousands) Three Months Ended March 31 2016 2015 Segment Operating Income Surfactants $ 37,245 $ 33,764 Polymers 22,197 14,785 Specialty Products 2,333 2,244 Segment operating income 61,775 50,793 Unallocated corporate expenses (1) (17,168 ) (15,615 ) Consolidated operating income 44,607 35,178 Interest expense, net (3,614 ) (4,054 ) Loss from equity in joint ventures — (1,240 ) Other, net (525 ) 652 Consolidated income before income taxes $ 40,468 $ 30,536 (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 (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Debt | At March 31, 2016, and December 31, 2015, debt comprised the following: (In thousands) Maturity Dates March 31, 2016 December 31, 2015 (1) Unsecured private placement notes 3.95% (net of unamortized debt issuance cost of $374 and $383 for 2016 and 2015, respectively) 2021-2027 $ 99,626 $ 99,617 3.86% (net of unamortized debt issuance cost of $428 and $440 for 2016 and 2015, respectively) 2019-2025 99,572 99,560 4.86% (net of unamortized debt issuance cost of $252 and $260 for 2016 and 2015, respectively) 2017-2023 64,748 64,740 5.88% (net of unamortized debt issuance cost of $135 and $140 for 2016 and 2015, respectively) 2016-2022 39,865 39,860 5.69% (net of unamortized debt issuance cost of $42 and $46 for 2016 and 2015, respectively) 2016-2018 17,100 17,096 Unsecured U.S. bank debt 2019 — — Debt of foreign subsidiaries Unsecured bank debt, foreign currency 2016 59 4,810 Unsecured bank term loan, foreign currency 2021 3,740 3,724 Secured bank debt, foreign currency 2015 3,140 1,947 Total debt $ 327,850 $ 331,354 Less current maturities 15,277 18,806 Long-term debt $ 312,573 $ 312,548 (1) Certain balances have been restated from those originally reported at December 31, 2015, due to the Company’s January 1, 2016, adoption of the new U.S. GAAP guidance regarding the classification of debt issuance costs. See Note 16 for additional information regarding ASU No. 2015-03. |
Other, Net (Tables)
Other, Net (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
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 March 31 2016 2015 Foreign exchange losses $ (311 ) $ (2 ) Investment income 92 123 Realized and unrealized gains (losses) on investments (306 ) 531 Other, net $ (525 ) $ 652 |
Reconciliations of Equity - Rec
Reconciliations of Equity - Reconciliations of Total Equity (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | ||
Reconciliations of total equity | |||
Beginning Balance | $ 558,384 | $ 536,944 | |
Net income | 27,657 | 21,286 | |
Dividends | (4,237) | (4,047) | |
Common stock purchases | [1] | (1,143) | (273) |
Stock option exercises | 258 | 167 | |
Defined benefit pension adjustments, net of tax | 564 | 749 | |
Translation adjustments | 12,590 | (25,152) | |
Derivative instrument activity, net of tax | (21) | (42) | |
Other | [2] | 2,191 | 846 |
Ending Balance | 596,243 | 530,478 | |
Stepan Company Equity [Member] | |||
Reconciliations of total equity | |||
Beginning Balance | 556,984 | 535,546 | |
Net income | 27,654 | 21,270 | |
Dividends | (4,237) | (4,047) | |
Common stock purchases | [1] | (1,143) | (273) |
Stock option exercises | 258 | 167 | |
Defined benefit pension adjustments, net of tax | 564 | 749 | |
Translation adjustments | 12,579 | (25,137) | |
Derivative instrument activity, net of tax | (21) | (42) | |
Other | [2] | 2,191 | 846 |
Ending Balance | 594,829 | 529,079 | |
Noncontrolling Interests' Equity [Member] | |||
Reconciliations of total equity | |||
Beginning Balance | [3] | 1,400 | 1,398 |
Net income | [3] | 3 | 16 |
Translation adjustments | [3] | 11 | (15) |
Ending Balance | [3] | $ 1,414 | $ 1,399 |
[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 distributions of deferred performance awards and deferred incentive compensation. | ||
[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 | Mar. 31, 2016 | Dec. 31, 2015 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Carrying value | $ 329,081 | $ 332,623 |
Level 2 [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fair value | $ 337,472 | $ 331,183 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Assets and Liabilities Measured on a Recurring Basis at Fair Value (Detail) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Mutual fund assets | $ 20,787 | $ 20,910 |
Derivative assets: | ||
Foreign currency contracts | 582 | 112 |
Total assets at fair value | 21,369 | 21,022 |
Derivative liabilities: | ||
Foreign currency contracts | 95 | 305 |
Interest rate contracts | 81 | 53 |
Total liabilities at fair value | 176 | 358 |
Level 1 [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Mutual fund assets | 20,787 | 20,910 |
Derivative assets: | ||
Total assets at fair value | 20,787 | 20,910 |
Level 2 [Member] | ||
Derivative assets: | ||
Foreign currency contracts | 582 | 112 |
Total assets at fair value | 582 | 112 |
Derivative liabilities: | ||
Foreign currency contracts | 95 | 305 |
Interest rate contracts | 81 | 53 |
Total liabilities at fair value | $ 176 | $ 358 |
Derivative Instruments - Additi
Derivative Instruments - Additional Information (Detail) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2015 | |
Derivative Instruments And Hedging Activities Disclosures [Line Items] | ||
Derivative notional amount | $ 29,703,000 | $ 31,194,000 |
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 | $ 3,740,000 | $ 3,724,000 |
Stock-Based Compensation - Comp
Stock-Based Compensation - Compensation Expense (Income) Recorded for All Stock Options, Stock Awards and SARs (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||
Compensation expense (income) | $ 2,423 | $ 798 |
Stock-Based Compensation - Unre
Stock-Based Compensation - Unrecognized Compensation Costs for Stock Options, Stock Awards and SARs (Detail) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Stock Option [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Unrecognized compensation costs for stock options, stock awards and SARs | $ 1,839 | $ 784 |
Stock Awards [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Unrecognized compensation costs for stock options, stock awards and SARs | 6,545 | 3,396 |
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 | $ 4,048 | $ 1,644 |
Stock-Based Compensation - Shar
Stock-Based Compensation - Share Based Payment Awards Granted in Period (Detail) | 3 Months Ended |
Mar. 31, 2016shares | |
Stock Option [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Stock options granted in period | 99,730 |
Stock Awards (at target) [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Awards granted in period | 72,997 |
Stock Appreciation Rights (SARs) [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Awards granted in period | 218,660 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2016 | |
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 7 months 6 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 3 months 18 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 7 months 6 days |
Inventories - Composition of In
Inventories - Composition of Inventories (Detail) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 127,698 | $ 124,481 |
Raw materials | 50,089 | 45,943 |
Total inventories | $ 177,787 | $ 170,424 |
Inventories - Additional Inform
Inventories - Additional Information (Detail) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Inventory Disclosure [Abstract] | ||
LIFO reserve | $ 20,723,000 | $ 18,171,000 |
Contingencies - Additional Info
Contingencies - Additional Information (Detail) - USD ($) | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Site Contingency [Line Items] | |||
Environmental and legal losses, minimum | $ 21,800,000 | ||
Environmental and legal losses, maximum | 42,400,000 | ||
Accrued liability for losses | 21,800,000 | $ 20,900,000 | |
Cash outlays related to legal and environmental matters | 300,000 | $ 300,000 | |
VAT inflation, penalty and interest charges | $ 0 | ||
Wilmington Site [Member] | |||
Site Contingency [Line Items] | |||
Contribution for future response costs | 5.00% | ||
Payment of environmental response costs | $ 2,400,000 |
Postretirement Benefit Plans -
Postretirement Benefit Plans - Components of Net Periodic Benefit Cost (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
United States [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Interest cost | $ 1,729 | $ 1,701 |
Expected return on plan assets | (2,254) | (2,393) |
Amortization of net actuarial loss | 882 | 1,149 |
Net periodic benefit cost | 357 | 457 |
United Kingdom [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Interest cost | 193 | 195 |
Expected return on plan assets | (238) | (262) |
Amortization of net actuarial loss | 20 | 45 |
Net periodic benefit cost | $ (25) | $ (22) |
Postretirement Benefit Plans 46
Postretirement Benefit Plans - Defined Benefit Pension Plans - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2016USD ($) | |
U.S Plans [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Expected payment related to qualified plan | $ 0 |
Expected payment related to unqualified plan | 178,000 |
Payments related to non-qualified plans | 110,000 |
U.K Plans [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Expected payment related to qualified plan | 361,000 |
Employer contributions | $ 88,000 |
Postretirement Benefit Plans 47
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 | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Defined Contribution Plan Disclosure [Line Items] | ||
Total defined contribution expense | $ 3,008 | $ 2,164 |
Retirement Savings Plans [Member] | ||
Defined Contribution Plan Disclosure [Line Items] | ||
Total defined contribution expense | 1,291 | 1,184 |
Profit Sharing Plan [Member] | ||
Defined Contribution Plan Disclosure [Line Items] | ||
Total defined contribution expense | $ 1,717 | $ 980 |
Postretirement Benefit Plans 48
Postretirement Benefit Plans - Defined Contribution Plans - Additional Information (Detail) | Mar. 31, 2016USD ($) |
Defined Contribution Plans [Member] | |
Defined Contribution Plan Disclosure [Line Items] | |
Balance of trust assets | $ 1,815,000 |
Earnings Per Share - Computatio
Earnings Per Share - Computations of Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | ||
Computation of Basic Earnings per Share | |||
Net income attributable to Stepan Company | $ 27,654 | $ 21,270 | |
Weighted-average number of common shares outstanding | 22,733 | 22,718 | |
Basic earnings per share | $ 1.22 | $ 0.94 | |
Computation of Diluted Earnings per Share | |||
Net income attributable to Stepan Company | $ 27,654 | $ 21,270 | |
Weighted-average number of common shares outstanding | 22,733 | 22,718 | |
Add weighted-average net shares from assumed exercise of options (under treasury stock method) | [1] | 113 | 104 |
Add weighted-average net shares related to unvested stock awards (under treasury stock method) | 4 | 5 | |
Weighted-average shares applicable to diluted earnings | 22,882 | 22,827 | |
Diluted earnings per share | $ 1.21 | $ 0.93 | |
Stock Appreciation Rights (SARs) [Member] | |||
Computation of Diluted Earnings per Share | |||
Add weighted-average net shares from assumed exercise of options (under treasury stock method) | 8 | ||
Performance Stock Award [Member] | |||
Computation of Diluted Earnings per Share | |||
Add weighted-average net shares from assumed exercise of options (under treasury stock method) | 24 | ||
[1] | Options to purchase 89,617 and 226,098 shares of Company common stock were excluded from the computations of diluted earnings per share for the three months ended March 31, 2016 and March 31, 2015, respectively. The options’ exercise prices were greater than the average market price for the common stock, and the effect of including the options would have been antidilutive. |
Earnings Per Share - Computat50
Earnings Per Share - Computations of Basic and Diluted Earnings Per Share (Parenthetical) (Detail) - shares | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Earnings Per Share [Abstract] | ||
Options to purchase shares of common stock were excluded from the computations of diluted earnings per share | 89,617 | 226,098 |
Accumulated Other Comprehensi51
Accumulated Other Comprehensive Income (Loss) - Summary of Changes in Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Accumulated Other Comprehensive Income (Loss), beginning balance | $ (125,088) | $ (83,945) |
Other comprehensive income before reclassifications | 12,556 | (25,180) |
Amounts reclassified from AOCI | 566 | 750 |
Net current-period other comprehensive income | 13,122 | (24,430) |
Accumulated Other Comprehensive Income (Loss), ending balance | (111,966) | (108,375) |
Foreign Currency Translation Adjustments [Member] | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Accumulated Other Comprehensive Income (Loss), beginning balance | (88,337) | (42,914) |
Other comprehensive income before reclassifications | 12,579 | (25,137) |
Net current-period other comprehensive income | 12,579 | (25,137) |
Accumulated Other Comprehensive Income (Loss), ending balance | (75,758) | (68,051) |
Defined Benefit Pension Plan Adjustments [Member] | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Accumulated Other Comprehensive Income (Loss), beginning balance | (36,825) | (41,149) |
Amounts reclassified from AOCI | 564 | 749 |
Net current-period other comprehensive income | 564 | 749 |
Accumulated Other Comprehensive Income (Loss), ending balance | (36,261) | (40,400) |
Cash Flow Hedge Adjustments [Member] | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Accumulated Other Comprehensive Income (Loss), beginning balance | 74 | 118 |
Other comprehensive income before reclassifications | (23) | (43) |
Amounts reclassified from AOCI | 2 | 1 |
Net current-period other comprehensive income | (21) | (42) |
Accumulated Other Comprehensive Income (Loss), ending balance | $ 53 | $ 76 |
Accumulated Other Comprehensi52
Accumulated Other Comprehensive Income (Loss) - Summary of Amounts Reclassifications Out of Accumulated Other Comprehensive Income (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | ||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||
Tax benefit | $ (12,811) | $ (9,250) | |
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] | (902) | (1,194) |
Tax benefit | [1] | 338 | 445 |
Income applicable to common stock | [1] | (564) | (749) |
Cash Flow Hedge Adjustments [Member] | Amounts Reclassified From Accumulated Other Comprehensive Income [Member] | |||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||
Total before tax | [1] | (4) | (3) |
Tax benefit | [1] | 2 | 2 |
Income applicable to common stock | [1] | (2) | (1) |
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] | (6) | (5) |
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] | 2 | 2 |
Accumulated Other Comprehensive Income (Loss) [Member] | |||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||
Income applicable to common stock | [1] | $ (566) | $ (750) |
[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) | 3 Months Ended |
Mar. 31, 2016Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
Segment Reporting - Operating S
Segment Reporting - Operating Segment (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Segment Reporting Information [Line Items] | ||
Net Sales | $ 445,897 | $ 460,451 |
Surfactants [Member] | ||
Segment Reporting Information [Line Items] | ||
Net Sales | 309,960 | 330,551 |
Polymers [Member] | ||
Segment Reporting Information [Line Items] | ||
Net Sales | 113,898 | 109,364 |
Specialty Products [Member] | ||
Segment Reporting Information [Line Items] | ||
Net Sales | $ 22,039 | $ 20,536 |
Segment Reporting - Reconciliat
Segment Reporting - Reconciliation of Segment Information to Consolidated Financial Statements (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | ||
Segment Reporting Information [Line Items] | |||
Operating income | $ 44,607 | $ 35,178 | |
Interest expense, net | (3,614) | (4,054) | |
Loss from equity in joint ventures | (1,240) | ||
Other, net | (525) | 652 | |
Income Before Provision for Income Taxes | 40,468 | 30,536 | |
Operating Segments [Member] | |||
Segment Reporting Information [Line Items] | |||
Operating income | 61,775 | 50,793 | |
Operating Segments [Member] | Surfactants [Member] | |||
Segment Reporting Information [Line Items] | |||
Operating income | 37,245 | 33,764 | |
Operating Segments [Member] | Polymers [Member] | |||
Segment Reporting Information [Line Items] | |||
Operating income | 22,197 | 14,785 | |
Operating Segments [Member] | Specialty Products [Member] | |||
Segment Reporting Information [Line Items] | |||
Operating income | 2,333 | 2,244 | |
Segment Reconciling Items [Member] | |||
Segment Reporting Information [Line Items] | |||
Unallocated corporate expenses | [1] | $ (17,168) | $ (15,615) |
[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 | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2015 | ||
Debt Instrument [Line Items] | |||
Total debt | $ 327,850 | $ 331,354 | |
Less current maturities | 15,277 | 18,806 | |
Long-term debt | 312,573 | 312,548 | |
Unsecured private placement 3.95% note [Member] | |||
Debt Instrument [Line Items] | |||
Total debt | $ 99,626 | $ 99,617 | [1] |
Debt instrument interest rate percentage | 3.95% | 3.95% | |
Unsecured private placement 3.95% note [Member] | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Maturity Dates | 2,021 | 2,021 | |
Unsecured private placement 3.95% note [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Maturity Dates | 2,027 | 2,027 | |
Unsecured private placement 3.86% note [Member] | |||
Debt Instrument [Line Items] | |||
Total debt | $ 99,572 | $ 99,560 | [1] |
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 | $ 64,748 | $ 64,740 | [1] |
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 | $ 39,865 | $ 39,860 | [1] |
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 | $ 17,100 | $ 17,096 | [1] |
Debt instrument interest rate percentage | 5.69% | 5.69% | |
Unsecured private placement 5.69% note [Member] | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Maturity Dates | 2,016 | 2,016 | |
Unsecured private placement 5.69% note [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Maturity Dates | 2,018 | 2,018 | |
Unsecured U.S. bank debt [Member] | |||
Debt Instrument [Line Items] | |||
Maturity Dates | 2,019 | 2,019 | |
Debt of foreign subsidiaries Unsecured bank debt, foreign currency [Member] | |||
Debt Instrument [Line Items] | |||
Total debt | $ 59 | $ 4,810 | |
Maturity Dates | 2,016 | 2,016 | |
Debt of foreign subsidiaries Unsecured bank term loan, foreign currency [Member] | |||
Debt Instrument [Line Items] | |||
Total debt | $ 3,740 | $ 3,724 | |
Maturity Dates | 2,021 | 2,021 | |
Debt of foreign subsidiaries Secured bank debt, foreign currency [Member] | |||
Debt Instrument [Line Items] | |||
Total debt | $ 3,140 | $ 1,947 | |
Maturity Dates | 2,015 | 2,015 | |
[1] | Certain balances have been restated from those originally reported at December 31, 2015, due to the Company’s January 1, 2016, adoption of the new U.S. GAAP guidance regarding the classification of debt issuance costs. See Note 16 for additional information regarding ASU No. 2015-03. |
Debt - Debt (Parenthetical) (De
Debt - Debt (Parenthetical) (Detail) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||
Unamortized debt issuance cost | $ 1,269,000 | |
Unsecured private placement 3.95% note [Member] | ||
Debt Instrument [Line Items] | ||
Unamortized debt issuance cost | $ 374,000 | 383,000 |
Unsecured private placement 3.86% note [Member] | ||
Debt Instrument [Line Items] | ||
Unamortized debt issuance cost | 428,000 | 440,000 |
Unsecured private placement 4.86% note [Member] | ||
Debt Instrument [Line Items] | ||
Unamortized debt issuance cost | 252,000 | 260,000 |
Unsecured private placement 5.88% note [Member] | ||
Debt Instrument [Line Items] | ||
Unamortized debt issuance cost | 135,000 | 140,000 |
Unsecured private placement 5.69% note [Member] | ||
Debt Instrument [Line Items] | ||
Unamortized debt issuance cost | $ 42,000 | $ 46,000 |
Debt - Additional Information (
Debt - Additional Information (Detail) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2015 | |
Debt Instrument [Line Items] | ||
Net debt | $ 182,181,000 | $ 155,211,000 |
Multi currency revolving credit agreement [Member] | ||
Debt Instrument [Line Items] | ||
Revolving credit agreement | $ 125,000,000 | |
Credit agreement expiry Date | Jul. 10, 2019 | |
Letters of Credit Outstanding | $ 4,927,000 | |
Debt Outstanding | 0 | |
Unused Revolving credit | 120,073,000 | |
Unrestricted retained earnings | $ 132,546,000 | $ 119,891,000 |
Other, Net - Other Net in Conso
Other, Net - Other Net in Consolidated Statements of Income (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Other Nonoperating Income Expense [Abstract] | ||
Foreign exchange losses | $ (311) | $ (2) |
Investment income | 92 | 123 |
Realized and unrealized gains (losses) on investments | (306) | 531 |
Other, net | $ (525) | $ 652 |
Sale of Product Line - Addition
Sale of Product Line - Additional Information (Detail) - USD ($) | 3 Months Ended | |
Mar. 31, 2015 | Jan. 31, 2015 | |
Sale Of Product Line [Line Items] | ||
Gain from the kits sale | $ 2,862,000 | |
J6 Polymers, LLC [Member] | ||
Sale Of Product Line [Line Items] | ||
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 |
TIORCO, LLC Joint Venture - Add
TIORCO, LLC Joint Venture - Additional Information (Detail) | Mar. 31, 2016USD ($) |
TIORCO LLC [Member] | |
Schedule Of Equity Method Investments [Line Items] | |
Cash investment | $ 2,900,000 |
Recent Accounting Pronounceme62
Recent Accounting Pronouncements - Additional Information (Detail) | Dec. 31, 2015USD ($) |
Accounting Policies [Abstract] | |
Unamortized debt issuance cost | $ 1,269,000 |