Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Oct. 23, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | SCL | |
Entity Registrant Name | STEPAN COMPANY | |
Entity Current Reporting Status | Yes | |
Entity Central Index Key | 0000094049 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 22,461,438 | |
Entity Tax Identification Number | 36-1823834 | |
Entity File Number | 1-4462 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 22 West Frontage Road | |
Entity Address, City or Town | Northfield | |
Entity Address, State or Province | IL | |
Entity Address, Postal Zip Code | 60093 | |
City Area Code | 847 | |
Local Phone Number | 446-7500 | |
Security Exchange Name | NYSE | |
Title of 12(b) Security | Common Stock, $1 par value | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement [Abstract] | ||||
Net Sales | $ 464,480 | $ 451,582 | $ 1,375,016 | $ 1,413,755 |
Cost of Sales | 367,423 | 374,180 | 1,100,195 | 1,158,785 |
Gross Profit | 97,057 | 77,402 | 274,821 | 254,970 |
Operating Expenses: | ||||
Selling | 13,266 | 14,186 | 39,719 | 42,295 |
Administrative | 21,354 | 19,708 | 60,957 | 60,558 |
Research, development and technical services | 14,303 | 13,473 | 41,661 | 40,228 |
Deferred compensation expense | 5,613 | 1,610 | 4,754 | 11,478 |
Total Operating expenses | 54,536 | 48,977 | 147,091 | 154,559 |
Business restructuring expenses (Note 16) | (126) | (459) | (708) | (1,642) |
Operating Income | 42,395 | 27,966 | 127,022 | 98,769 |
Other Income (Expense): | ||||
Interest, net | (1,626) | (1,402) | (4,115) | (5,021) |
Other, net (Note 15) | 2,629 | 885 | 3,804 | 4,265 |
Nonoperating Income (Expense), Total | 1,003 | (517) | (311) | (756) |
Income Before Provision for Income Taxes | 43,398 | 27,449 | 126,711 | 98,013 |
Provision for Income Taxes | 10,056 | 1,569 | 29,987 | 16,945 |
Net Income | 33,342 | 25,880 | 96,724 | 81,068 |
Net (Income) Loss Attributable to Noncontrolling Interests (Note 2) | (174) | 9 | (304) | 23 |
Net Income Attributable to Stepan Company | $ 33,168 | $ 25,889 | $ 96,420 | $ 81,091 |
Net Income Per Common Share Attributable to Stepan Company (Note 10): | ||||
Basic | $ 1.45 | $ 1.12 | $ 4.20 | $ 3.52 |
Diluted | $ 1.43 | $ 1.11 | $ 4.15 | $ 3.48 |
Shares Used to Compute Net Income Per Common Share Attributable to Stepan Company (Note 10): | ||||
Basic | 22,907 | 23,025 | 22,951 | 23,070 |
Diluted | 23,237 | 23,300 | 23,236 | 23,320 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | ||
Statement Of Income And Comprehensive Income [Abstract] | |||||
Net income | $ 33,342 | $ 25,880 | $ 96,724 | $ 81,068 | |
Other comprehensive income: | |||||
Foreign currency translation adjustments (Note 11) | [1] | 8,631 | (19,287) | (29,025) | (11,290) |
Defined benefit pension adjustments, net of tax (Note 11) | 839 | 473 | 2,455 | 1,558 | |
Derivative instrument activity, net of tax (Note 11) | (3) | (2) | (7) | (6) | |
Total other comprehensive income | 9,467 | (18,816) | (26,577) | (9,738) | |
Comprehensive income | 42,809 | 7,064 | 70,147 | 71,330 | |
Comprehensive income attributable to noncontrolling interests (Note 2) | (211) | 41 | (330) | 62 | |
Comprehensive income attributable to Stepan Company | $ 42,598 | $ 7,105 | $ 69,817 | $ 71,392 | |
[1] | Includes foreign currency translation adjustments related to noncontrolling interest. |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Current Assets: | ||
Cash and cash equivalents | $ 310,392 | $ 315,383 |
Receivables, net | 295,616 | 276,841 |
Inventories (Note 6) | 202,315 | 203,647 |
Other current assets | 24,713 | 22,918 |
Total current assets | 833,036 | 818,789 |
Property, Plant and Equipment: | ||
Cost | 1,825,681 | 1,762,135 |
Less: Accumulated depreciation | (1,173,995) | (1,122,818) |
Property, plant and equipment, net | 651,686 | 639,317 |
Goodwill, net | 27,152 | 26,086 |
Other intangible assets, net | 22,959 | 15,352 |
Long-term investments (Note 3) | 28,285 | 28,227 |
Operating lease assets | 39,408 | 38,386 |
Other non-current assets | 15,125 | 13,210 |
Total assets | 1,617,651 | 1,579,367 |
Current Liabilities: | ||
Current maturities of long-term debt (Note 14) | 37,857 | 23,571 |
Accounts payable | 207,553 | 194,276 |
Accrued liabilities | 115,756 | 121,267 |
Total current liabilities | 361,166 | 339,114 |
Deferred income taxes | 23,994 | 23,391 |
Long-term debt, less current maturities (Note 14) | 170,063 | 198,532 |
Non-current operating lease liabilities | 29,490 | 29,654 |
Other non-current liabilities | 93,702 | 96,180 |
Commitments and Contingencies (Note 8) | ||
Equity: | ||
Common stock, $1 par value; authorized 60,000,000 shares; Issued 26,615,132 shares in 2020 and 26,493,335 shares in 2019 | 26,615 | 26,493 |
Additional paid-in capital | 203,963 | 193,135 |
Accumulated other comprehensive loss (Note 11) | (162,773) | (136,170) |
Retained earnings | 1,000,337 | 922,464 |
Less: Common treasury stock, at cost, 4,153,694 shares in 2020 and 3,979,735 shares in 2019 | (129,949) | (114,139) |
Total Stepan Company stockholders’ equity | 938,193 | 891,783 |
Noncontrolling interests (Note 2) | 1,043 | 713 |
Total equity | 939,236 | 892,496 |
Total liabilities and equity | $ 1,617,651 | $ 1,579,367 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 |
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 | 26,615,132 | 26,493,335 |
Treasury stock, shares | 4,153,694 | 3,979,735 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash Flows From Operating Activities | ||
Net income | $ 96,724 | $ 81,068 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 60,859 | 58,545 |
Deferred compensation | 4,754 | 11,478 |
Realized and unrealized gains on long-term investments | (2,169) | (2,806) |
Stock-based compensation | 7,414 | 7,045 |
Deferred income taxes | 257 | (2,291) |
Other non-cash items | 860 | 2,192 |
Changes in assets and liabilities: | ||
Receivables, net | (28,405) | (8,959) |
Inventories | (2,574) | 25,879 |
Other current assets | (4,215) | (3,750) |
Accounts payable and accrued liabilities | 12,041 | (35,330) |
Pension liabilities | (418) | (979) |
Environmental and legal liabilities | (3,388) | 800 |
Deferred revenues | (62) | (243) |
Net Cash Provided By Operating Activities | 141,678 | 132,649 |
Cash Flows From Investing Activities | ||
Expenditures for property, plant and equipment | (84,903) | (70,829) |
Asset acquistion (Note 17) | (2,040) | |
Business acquisition, net of cash acquired (Note 17) | (13,519) | |
Other, net | 2,332 | 2,332 |
Net Cash Used In Investing Activities | (98,130) | (68,497) |
Cash Flows From Financing Activities | ||
Revolving debt and bank overdrafts, net | (6,929) | |
Other debt repayments | (14,286) | (37,143) |
Dividends paid | (18,547) | (16,911) |
Company stock repurchased | (13,753) | (13,184) |
Stock option exercises | 2,835 | 2,830 |
Other, net | (889) | (3,101) |
Net Cash Used In Financing Activities | (44,640) | (74,438) |
Effect of Exchange Rate Changes on Cash | (3,899) | (3,913) |
Net Decrease in Cash and Cash Equivalents | (4,991) | (14,199) |
Cash and Cash Equivalents at Beginning of Period | 315,383 | 300,194 |
Cash and Cash Equivalents at End of Period | 310,392 | 285,995 |
Supplemental Cash Flow Information | ||
Cash payments of income taxes, net of refunds/payments | 27,420 | 21,698 |
Cash payments of interest | $ 6,916 | $ 9,311 |
Condensed Consolidated Financia
Condensed Consolidated Financial Statements | 9 Months Ended |
Sep. 30, 2020 | |
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 (the 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 (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 September 30, 2020, and its results of operations for the three and nine months ended September 30, 2020 and 2019, and cash flows for the nine months ended September 30, 2020 and 2019, 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 2019 Annual Report on Form 10-K. |
Reconciliations of Equity
Reconciliations of Equity | 9 Months Ended |
Sep. 30, 2020 | |
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 and nine months ended September 30, 2020 and 2019: (In thousands, except share and per share amounts) Total Common Stock Additional Paid-in Capital Treasury Stock Accumulated Other Comprehensive Income (Loss) Retained Earnings Noncontrolling Interest (1) Balance at June 30, 2020 898,261 26,552 198,947 (129,212 ) (172,203 ) 973,345 832 Issuance of 40,435 shares of common stock under stock option plan 2,443 40 2,403 — — — — Stock-based and deferred compensation 1,899 23 2,613 (737 ) — — — Net income 33,342 — — — — 33,168 174 Other comprehensive income 9,467 — — — 9,430 — 37 Cash dividends paid: Common stock ($0.28 per share) (6,176 ) — — — — (6,176 ) — Balance at September 30, 2020 $ 939,236 $ 26,615 $ 203,963 $ (129,949 ) $ (162,773 ) $ 1,000,337 $ 1,043 (In thousands, except share and per share amounts) Total Common Stock Additional Paid-in Capital Treasury Stock Accumulated Other Comprehensive Income (Loss) Retained Earnings Noncontrolling Interest (1) Balance at December 31, 2019 $ 892,496 $ 26,493 $ 193,135 $ (114,139 ) $ (136,170 ) $ 922,464 $ 713 Issuance of 47,115 shares of common stock under stock option plan 2,835 47 2,788 — — — — Purchase of 160,780 shares of common stock on the open market (13,753 ) — — (13,753 ) — — — Stock-based and deferred compensation 6,058 75 8,040 (2,057 ) — — — Net income 96,724 — — — — 96,420 304 Other comprehensive income (26,577 ) — — — (26,603 ) — 26 Cash dividends paid: Common stock ($0.84 per share) (18,547 ) — — — — (18,547 ) — Balance at September 30, 2020 $ 939,236 $ 26,615 $ 203,963 $ (129,949 ) $ (162,773 ) $ 1,000,337 $ 1,043 (In thousands, except share and per share amounts) Total Common Stock Additional Paid-in Capital Treasury Stock Accumulated Other Comprehensive Income (Loss) Retained Earnings Noncontrolling Interest (1) Balance at June 30, 2019 858,397 26,453 188,781 (106,202 ) (137,723 ) 886,349 739 Issuance of 13,256 shares of common stock under stock option plan 667 13 654 — — — — Purchase of 73,821 shares of common stock on the open market (7,003 ) — — (7,003 ) — — — Stock-based and deferred compensation 1,408 15 1,969 (576 ) — — — Net income 25,880 — — — — 25,889 (9 ) Other comprehensive income (18,816 ) — — — (18,784 ) — (32 ) Cash dividends paid: Common stock ($0.25 per share) (5,626 ) — — — — (5,626 ) — Balance at September 30, 2019 $ 854,907 $ 26,481 $ 191,404 $ (113,781 ) $ (156,507 ) $ 906,612 $ 698 (In thousands, except share and per share amounts) Total Common Stock Additional Paid-in Capital Treasury Stock Accumulated Other Comprehensive Income (Loss) Retained Earnings Noncontrolling Interest (1) Balance, December 31, 2018 $ 808,185 $ 26,309 $ 182,881 $ (97,389 ) $ (141,483 ) $ 837,107 $ 760 Issuance of 56,385 shares of common stock under stock option plan 2,830 56 2,774 — — — — Purchase of 144,457 shares of common stock on the open market (13,184 ) — — (13,184 ) — — — Stock-based and deferred compensation 2,657 116 5,749 (3,208 ) — — — Net income 81,068 — — — — 81,091 (23 ) Other comprehensive income (9,738 ) — — — (9,699 ) — (39 ) Cash dividends paid: Common stock ($0.75 per share) (16,911 ) — — — — (16,911 ) — Other (2) — — — — (5,325 ) 5,325 — Balance at September 30, 2019 $ 854,907 $ 26,481 $ 191,404 $ (113,781 ) $ (156,507 ) $ 906,612 $ 698 (1) (2) Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 3 . FAIR VALUE MEASUREMENTS The following were the financial instruments held by the Company at September 30, 2020, and December 31, 2019, 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. Fair value of cash and cash equivalents is a Level 1 measurement. Derivative assets and liabilities Derivative assets and liabilities include the foreign currency exchange 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. See the table below that describes financial assets and liabilities measured on a recurring basis for the reported fair values of derivative assets and liabilities. Long-term investments Long-term investments include 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 9). Fair value and carrying value were the same because the mutual fund assets were recorded at fair value. 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 September 30, 2020, and December 31, 2019, the fair values and related carrying values of debt, including current maturities, were as follows (the fair value and carrying value amounts are presented without regard to unamortized debt issuance costs of $651,000 and $754,000 as of September 30, 2020 and December 31, 2019, respectively): (In thousands) September 30, 2020 December 31, 2019 Fair value $ 218,764 $ 226,712 Carrying value 208,571 222,857 The following tables present financial assets and liabilities, excluding cash and cash equivalents, measured on a recurring basis at fair value as of September 30, 2020, and December 31, 2019, and the level within the fair value hierarchy in which the fair value measurements fall: (In thousands) September 2020 Level 1 Level 2 Level 3 Mutual fund assets $ 28,285 $ 28,285 $ — $ — Derivative assets: Foreign currency contracts 28 — 28 — Total assets at fair value $ 28,313 $ 28,285 $ 28 $ — Derivative liabilities: Foreign currency contracts $ 924 $ — $ 924 $ — (In thousands) December 2019 Level 1 Level 2 Level 3 Mutual fund assets $ 28,227 $ 28,227 $ — $ — Derivative assets: Foreign currency contracts 981 — 981 — Total assets at fair value $ 29,208 $ 28,227 $ 981 $ — Derivative liabilities: Foreign currency contracts $ 429 $ — $ 429 $ — |
Derivative Instruments
Derivative Instruments | 9 Months Ended |
Sep. 30, 2020 | |
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 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 September 30, 2020, and December 31, 2019, the Company had open forward foreign currency exchange contracts, all with durations of one to three months, to buy or sell foreign currencies with U.S. dollar equivalent amounts of $46,721,506 and $48,540,368, respectively. The fair values of the derivative instruments held by the Company on September 30, 2020, and December 31, 2019, are disclosed in Note 3. Derivative instrument gains and losses for the three- and nine-month periods ended September 30, 2020 and 2019, were immaterial. For amounts reclassified out of accumulated other comprehensive income (loss) (AOCI) into earnings for the three- and nine-month periods ended September 30, 2020 and 2019, see Note 11. |
Stock-based Compensation
Stock-based Compensation | 9 Months Ended |
Sep. 30, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-based Compensation | 5 . STOCK-BASED COMPENSATION On September 30, 2020, the Company had stock options, stock awards and stock appreciation rights (SARs) outstanding under its 2011 Incentive Compensation Plan. SARs granted prior to 2015 are cash-settled, and SARs granted in 2015 and later are stock-settled. Stock options and SARs granted prior to 2017 generally cliff vested after two years. Starting in 2017, stock options and SARs have a three-year one-third Compensation expense recorded for all stock options, stock awards and SARs was as follows: (In thousands) Three Months Ended September 30 Nine Months Ended September 30 2020 2019 2020 2019 $ 3,223 $ 2,273 $ 7,414 $ 7,045 The increase in stock-based compensation expense for the third quarter of 2020 compared to the third quarter of 2019 was primarily attributable to cash-settled SARs. The increase in cash-settled SARs compensation expense reflects a larger increase in the market value of Company stock during the third quarter of 2020 versus the increase in the market value of Company stock during the third quarter of 2019. Unrecognized compensation costs for stock options, stock awards and SARs were as follows: (In thousands) September 30, 2020 December 31, 2019 Stock options $ 2,441 $ 1,850 Stock awards 5,518 3,618 SARs 5,314 4,058 The increases in unrecognized compensation costs for stock options, stock awards and SARs reflected the 2020 grants of: Shares Stock options 81,734 Stock awards (at target) 43,518 SARs 175,760 The unrecognized compensation costs at September 30, 2020, are expected to be recognized over a weighted-average period of 1.8 years |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | 6 . INVENTORIES The composition of inventories at September 30, 2020, and December 31, 2019, was as follows: (In thousands) September 30, 2020 December 31, 2019 Finished goods $ 143,964 $ 139,785 Raw materials 58,351 63,862 Total inventories $ 202,315 $ 203,647 |
Leases
Leases | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Leases | 7. LEASES The Company’s operating leases are primarily comprised of railcars, real estate, storage tanks, autos, trailers and manufacturing/office equipment. Railcars and real estate comprise approximately 43 percent and 34 percent, respectively, of the Company’s consolidated ROU asset balance. Except for real estate, typical lease terms range from one to ten years. Real estate lease terms typically range from one to fifty years. The Company’s two principal real estate leases relate to land leases in the Philippines and Singapore. As most of the Company’s leases do not provide an implicit borrowing rate, the Company uses its incremental borrowing rate (IBR) based on the information available at the commencement date in determining the present value of lease payments. IBRs were specifically determined for the United States, the Philippines, Singapore, Brazil and China, typically for five-year increments. The U.S. IBR was used for all other countries as the leases in these countries are not material. The total value of leases of property in the five countries identified above represents approximately 97 percent of the Company’s consolidated ROU asset balance. (In thousands) Three months ended September 30, 2020 Nine months ended September 30, 2020 Lease Cost Operating lease cost $ 3,101 $ 8,583 Short-term lease cost 1,105 3,488 Variable lease cost 203 802 Total lease cost $ 4,409 $ 12,873 Other Information Cash paid for amounts included in the measurement of lease liabilities: Operating cash flow from operating leases $ 3,124 $ 8,658 Right-of-use assets obtained in exchange for new operating lease liabilities 3,666 5,160 (In thousands) Undiscounted Cash Flows: 2020 (excluding the nine months ended September 30, 2020) $ 3,072 2021 10,666 2022 8,641 2023 6,091 2024 3,602 Subsequent to 2024 17,117 Total Undiscounted Cash Flows $ 49,189 Less: Imputed interest (9,761 ) Present value $ 39,428 Current operating lease liabilities (1) 9,938 Non-current operating lease liabilities 29,490 Total lease liabilities $ 39,428 (1) This item is included in Accrued liabilities line on the Company’s Condensed Consolidated Balance Sheet. Weighted-average remaining lease term-operating leases 8 Years Weighted-average discount rate-operating leases 4.0% |
Contingencies
Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Contingencies | 8 . CONTINGENCIES There are a variety of legal proceedings pending or threatened against the Company that occur in the normal course of the Company’s business, the majority of which relate to environmental assessment, protection and remediation matters. 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) as well as comparable regulations applicable to the Company’s foreign locations. Over the years, the Company has received requests for information related to or has been named by government authorities as a potentially responsible party (PRP) at a number of 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 is likely to incur with respect to these sites and claims. In determining the appropriate level of environmental reserves, the Company considers several factors such as information obtained from investigatory studies; changes in the scope of remediation; the interpretation, application and enforcement of laws and regulations; changes in the costs of remediation programs; the development of alternative cleanup technologies and methods; and the relative level of the Company’s involvement at various sites for which the Company is allegedly associated. The level of annual expenditures for remedial, monitoring and investigatory activities will change in the future as major components of planned remediation activities are completed and the scope, timing and costs of existing activities are changed. As of September 30, 2020, the Company estimated a range of possible environmental and legal losses of $22,448,000 to $41,146,000. Within the range of possible environmental and legal losses, management has currently concluded that no single amount is more likely to occur than any other amounts in the range and, thus, has accrued at the lower end of the range. These accruals totaled $22,448,000 at September 30, 2020 and $25,905,000 at December 31, 2019. Although the Company believes that its reserves are adequate for environmental contingencies, it is possible due to the uncertainties noted above, that additional reserves could be required in the future. Cash expenditures related to legal and environmental matters approximated $3,781,000 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. 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, management believes that the Company has no material liability at these sites and that these matters, individually and in the aggregate, will not have a material effect on the Company’s financial position. 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. Following are summaries of the Company’s major contingencies at September 30, 2020: 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 (collectively, the Maywood site) were listed on the National Priorities List in September 1993 pursuant to the provisions of CERCLA because of alleged chemical contamination. Pursuant to (i) a September 21, 1987 Administrative Order on Consent entered into between the U.S. Environmental Protection Agency (USEPA) and the Company for property formerly owned by the Company at the Maywood site and (ii) the issuance of an order on November 12, 2004 by the USEPA to the Company for property currently owned by the Company at the Maywood site, 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 at the Maywood site, which requires the Company to perform remedial cleanup of the soil and buried waste. The USEPA has not yet issued a ROD for chemically-contaminated groundwater at the Maywood site. Based on the most current information available, the Company believes its recorded liability is reasonable having considered the range of estimated costs of remediation for the Maywood site. The estimate of the cost of remediation for the Maywood site could change as the Company continues to hold discussions with the USEPA, as the design of the remedial action is finalized, if a groundwater ROD is issued or if other PRPs are identified. The ultimate amount for which the Company is liable could differ materially 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 re quires 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 recorded liability for claims associated with s oil remediation of chemical contamination at the Maywood site were required. In addition, under the terms of a settlement agreement reached on November 12, 2004, the U.S. Department of Justice and the Company agreed to fulfill the terms of a Cooperative Agreement reached in 1985. Under the Cooperative Agreement, the United States is responsible for the removal of radioactive waste at the Maywood site and it has incurred and will incur future remediation costs at the site. 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 generated by the Company at several sites in New Jersey, including the D’Imperio site. The Company was named as a PRP in an October 2, 1998, lawsuit in the U.S. District Court for the District of New Jersey that involved the D’Imperio Site. In 2019, the PRPs were provided with updated remediation cost estimates by the PRP group technical consultant and project manager, which the Company considered in its determination of its range of estimated possible losses and liability balance. The changes in range of possible losses and liability balance were immaterial. Remediation work continues at the D’Imperio site. Based on current information, the Company believes that its recorded liability is reasonable having considered the range of estimated cost of remediation for the D’Imperio site. Depending on the ultimate cost of the remediation at this site, the amount for which the Company is liable could differ materially from the current estimates. Wilmington Site The Company is currently contractually obligated to contribute to the environmental response costs associated with the Company’s formerly-owned site in Wilmington, Massachusetts (the Wilmington site). Remediation at this site is being managed by its current owner to whom the Company sold the property in 1980. Under the Company’s October 1, 1993, agreement with the current owner of the Wilmington site, 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. The Company has paid the current owner $2,965,000 for the Company’s portion of environmental response costs at the Wilmington site through September 30, 2020. 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 materially from the current estimates. The Company and other prior owners of the Wilmington site 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. Other U.S. Sites Through the regular environmental monitoring of its plant production sites, the Company discovered levels of chemical contamination that were above thresholds allowed by law at its Millsdale, Illinois and Fieldsboro, New Jersey plants. The Company voluntarily reported its results to the applicable state environmental agencies. As a result, the Company is required to perform self-remediation of the affected areas. Based on current information, the Company believes that its recorded liability for the remediation of the affected areas is appropriate based on an estimate of expected costs. However, actual costs could differ materially from current estimates. |
Postretirement Benefit Plans
Postretirement Benefit Plans | 9 Months Ended |
Sep. 30, 2020 | |
Compensation And Retirement Disclosure [Abstract] | |
Postretirement Benefit Plans | 9 . 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 September 30 Nine Months Ended September 30 2020 2019 2020 2019 Interest cost $ 1,409 $ 1,640 $ 4,251 $ 4,962 Expected return on plan assets (2,435 ) (2,365 ) (7,309 ) (7,087 ) Amortization of net actuarial loss 1,092 563 3,196 1,867 Net periodic benefit cost (income) $ 66 $ (162 ) $ 138 $ (258 ) UNITED KINGDOM (In thousands) Three Months Ended September 30 Nine Months Ended September 30 2020 2019 2020 2019 Interest cost $ 111 $ 134 $ 327 $ 416 Expected return on plan assets (137 ) (190 ) (404 ) (589 ) Amortization of net actuarial loss 20 59 58 184 Net periodic benefit cost (income) $ (6 ) $ 3 $ (19 ) $ 11 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 is not required to make contributions to its funded U.S. qualified defined benefit plans. Approximately $299,000 is expected to be paid related to the unfunded non-qualified plans in 2020. Of such amount, $247,000 had been paid related to the non-qualified plans as of September 30, 2020. U.K. Plan The Company’s U.K. subsidiary expects to contribute approximately $495,000 to its defined benefit pension plan in 2020. Of such amount, $434,000 had been contributed to the plan as of September 30, 2020. Defined Contribution Plans The Company sponsors retirement savings defined contribution plans that cover eligible U.S. and U.K. employees. The Company’s U.S. retirement plans include two qualified plans, one of which is a 401(k) plan and one of which is an employee stock ownership plan, and one non-qualified supplemental executive plan. In the nine months ended September 30, 2020 and 2019, the Company made profit sharing contributions into the qualified retirement plans for U.S. employees and for certain non-U.S. employees. Profit sharing contributions were determined using a formula applied to Company earnings. In 2019 and 2020, profit sharing contributions for U.S. employees were made to the employee stock ownership plan. Profit sharing contributions are allocated to participant accounts based on participant base earnings. Defined contribution plan expenses for the Company’s qualified contribution plans were as follows: (In thousands) Three Months Ended September 30 Nine Months Ended September 30 2020 2019 2020 2019 Retirement savings contributions $ 1,813 $ 1,777 $ 5,521 $ 5,401 Profit sharing contributions plan 1,633 567 4,090 2,413 Total $ 3,446 $ 2,344 $ 9,611 $ 7,814 The Company has a rabbi trust to fund the obligations of its non-qualified supplemental executive defined contribution plans (supplemental plans). 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 September 30, 2020, the balance of the trust assets was $ 1,604,000 , which equaled the ba lance 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 | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 10 . EARNINGS PER SHARE Below are the computations of basic and diluted earnings per share for the three and nine months ended September 30, 2020 and 2019: (In thousands, except per share amounts) Three Months Ended September 30 Nine Months Ended September 30 2020 2019 2020 2019 Computation of Basic Earnings per Share Net income attributable to Stepan Company $ 33,168 $ 25,889 $ 96,420 $ 81,091 Weighted-average number of common shares outstanding 22,907 23,025 22,951 23,070 Basic earnings per share $ 1.45 $ 1.12 $ 4.20 $ 3.52 Computation of Diluted Earnings per Share Net income attributable to Stepan Company $ 33,168 $ 25,889 $ 96,420 $ 81,091 Weighted-average number of shares outstanding 22,907 23,025 22,951 23,070 Add weighted-average net shares from assumed exercise of options (under treasury stock method) (1) 119 102 107 95 Add weighted-average net shares related to unvested stock awards (under treasury stock method) 1 1 1 2 Add weighted-average net shares from assumed exercise of SARs (under treasury stock method) (1) 164 135 139 120 Add weighted-average contingently issuable net shares related to performance stock awards (under treasury stock method) 46 37 38 33 Weighted-average shares applicable to diluted earnings 23,237 23,300 23,236 23,320 Diluted earnings per share $ 1.43 $ 1.11 $ 4.15 $ 3.48 (1) September September |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | 11. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) Below is the change in the Company’s AOCI balance by component (net of income taxes) for the three and nine months ended September 30, 2020 and 2019: (In thousands) Foreign Currency Translation Adjustments Defined Benefit Pension Plan Adjustments Cash Flow Hedge Adjustments Total Balance at June 30, 2019 $ (100,477 ) $ (37,323 ) $ 77 $ (137,723 ) Other comprehensive income before reclassifications (19,255 ) — — (19,255 ) Amounts reclassified from AOCI — 473 (2 ) 471 Net current-period other comprehensive income (19,255 ) 473 (2 ) (18,784 ) Balance at September 30, 2019 $ (119,732 ) $ (36,850 ) $ 75 $ (156,507 ) Balance at June 30, 2020 $ (141,682 ) $ (30,589 ) $ 68 $ (172,203 ) Other comprehensive income before reclassifications 8,594 — — 8,594 Amounts reclassified from AOCI — 839 (3 ) 836 Net current-period other comprehensive income 8,594 839 (3 ) 9,430 Balance at September 30, 2020 $ (133,088 ) $ (29,750 ) $ 65 $ (162,773 ) Balance at December 31, 2018 $ (108,481 ) $ (33,083 ) $ 81 $ (141,483 ) Other comprehensive income before reclassifications (11,251 ) — — (11,251 ) Amounts reclassified from AOCI — 1,558 (6 ) 1,552 Remeasurement adjustment related to the Tax Act (1) — (5,325 ) — (5,325 ) Net current-period other comprehensive income (11,251 ) (3,767 ) (6 ) (15,024 ) Balance at September 30, 2019 $ (119,732 ) $ (36,850 ) $ 75 $ (156,507 ) Balance at December 31, 2019 $ (104,037 ) $ (32,205 ) $ 72 $ (136,170 ) Other comprehensive income before reclassifications (29,051 ) — — (29,051 ) Amounts reclassified from AOCI — 2,455 (7 ) 2,448 Net current-period other comprehensive income (29,051 ) 2,455 (7 ) (26,603 ) Balance at September 30, 2020 $ (133,088 ) $ (29,750 ) $ 65 $ (162,773 ) (1) Represents reclassification of the stranded tax effects resulting from the U.S. Tax Cuts and Jobs Act (Tax Act) from accumulated other comprehensive income (loss) to retained earnings in accordance with ASU 2018-02. Information regarding the reclassifications out of AOCI for the three- and nine-month periods ended September 30, 2020 and 2019, is displayed below: (In thousands) Amount Reclassified from AOCI (a) AOCI Components Three Months Ended September 30 Nine Months Ended September 30 Affected Line Item in Consolidated Statements of Income 2020 2019 2020 2019 Amortization of defined benefit pension actuarial losses $ (1,111 ) $ (622 ) $ (3,253 ) $ (2,051 ) (b) 272 149 798 493 Tax benefit $ (839 ) $ (473 ) $ (2,455 ) $ (1,558 ) Net of tax Gains and losses on cash flow hedges: Foreign exchange contracts 3 2 7 6 Cost of sales 3 2 7 6 Total before tax — — — — Tax benefit $ 3 $ 2 $ 7 $ 6 Net of tax Total reclassifications for the period $ (836 ) $ (471 ) $ (2,448 ) $ (1,552 ) 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 9 for additional details). |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Segment Reporting | 12. SEGMENT REPORTING The Company has three reportable segments: Surfactants, Polymers and Specialty Products. Net sales by segment for the three and nine months ended September 30, 2020 and 2019, were as follows: (In thousands) Three Months Ended September 30 Nine Months Ended September 30 2020 2019 2020 2019 Segment Net Sales Surfactants $ 333,839 $ 299,719 $ 993,245 $ 962,749 Polymers 116,682 135,089 335,582 395,904 Specialty Products 13,959 16,774 46,189 55,102 Total $ 464,480 $ 451,582 $ 1,375,016 $ 1,413,755 Segment operating income and reconciliations of segment operating income to income before provision for income taxes for the three and nine months ended September 30, 2020 and 2019, are summarized below: (In thousands) Three Months Ended September 30 Nine Months Ended September 30 2020 2019 2020 2019 Segment Operating Income Surfactants $ 41,151 $ 19,660 $ 125,810 $ 88,913 Polymers 22,387 23,283 45,430 58,148 Specialty Products 1,593 2,261 8,803 11,374 Segment operating income 65,131 45,204 180,043 158,435 Business restructuring (126 ) (459 ) (708 ) (1,642 ) Unallocated corporate expenses (1) (22,610 ) (16,779 ) (52,313 ) (58,024 ) Consolidated operating income 42,395 27,966 127,022 98,769 Interest expense, net (1,626 ) (1,402 ) (4,115 ) (5,021 ) Other, net 2,629 885 3,804 4,265 Income before provision for income taxes $ 43,398 $ 27,449 $ 126,711 $ 98,013 (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. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 9 Months Ended |
Sep. 30, 2020 | |
Revenue From Contract With Customer [Abstract] | |
Revenue from Contracts with Customers | 13. REVENUE FROM CONTRACTS WITH CUSTOMERS The Company deems a contract with a customer to exist when a purchase order is received from a customer for a specified quantity of product or products and the Company acknowledges receipt of such purchase order. In some instances the Company has entered into manufacturing supply agreements with customers but these agreements typically do not bind a customer to any purchase volume requirements and thus an obligation is not created until the customer submits a purchase order to the Company. The Company’s contracts typically have a single performance obligation that is satisfied at the time a product is shipped and control passes to the customer. For a small portion of the business, performance obligations are deemed satisfied when product is delivered to a customer location. As of September 30, 2020, the Company had $438,000 of contract liabilities and no contract assets. A contract liability would typically arise when an advance or deposit is received from a customer before the Company recognizes revenue. In practice, this is rare as it would require a customer to make a payment prior to a performance obligation being satisfied. When such situations do arise, the Company would maintain a deferred revenue liability until the time a performance obligation has been satisfied. The Company recognized $350,000 of revenue in the nine months of 2020 from pre-existing contract liabilities at December 31, 2019. The tables below provide a geographic disaggregation of net sales for the three and nine months ended September 30, 2020 and 2019. The Company’s business segmentation by geographic region most effectively captures the nature and economic characteristics of the Company’s revenue streams impacted by economic factors. For the Three Months Ended September 30, 2020 (In thousands) Surfactants Polymers Specialty Products Total Geographic Market North America $ 202,121 $ 68,635 $ 12,060 $ 282,816 Europe 56,468 38,337 1,899 96,704 Latin America 60,393 723 — 61,116 Asia 14,857 8,987 — 23,844 Total $ 333,839 $ 116,682 $ 13,959 $ 464,480 For the Three Months Ended September 30, 2019 (In thousands) Surfactants Polymers Specialty Products Total Geographic Market North America $ 178,799 $ 84,397 $ 14,035 $ 277,231 Europe 57,190 39,852 2,739 99,781 Latin America 51,940 792 — 52,732 Asia 11,790 10,048 — 21,838 Total $ 299,719 $ 135,089 $ 16,774 $ 451,582 For the Nine Months Ended September 30, 2020 (In thousands) Surfactants Polymers Specialty Products Total Geographic Market North America $ 617,638 $ 199,256 $ 38,883 $ 855,777 Europe 171,940 107,589 7,306 286,835 Latin America 163,097 1,825 — 164,922 Asia 40,570 26,912 — 67,482 Total $ 993,245 $ 335,582 $ 46,189 $ 1,375,016 For the Nine Months Ended September 30, 2019 (In thousands) Surfactants Polymers Specialty Products Total Geographic Market North America $ 584,816 $ 242,154 $ 46,127 $ 873,097 Europe 183,028 126,042 8,975 318,045 Latin America 156,709 2,439 — 159,148 Asia 38,196 25,269 — 63,465 Total $ 962,749 $ 395,904 $ 55,102 $ 1,413,755 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt | 14. DEBT At September 30, 2020, and December 31, 2019, debt was comprised of the following: (In thousands) Maturity Dates September 30, 2020 December 31, 2019 Unsecured private placement notes 3.95% (net of unamortized debt issuance cost of $284 and $316 for 2020 and 2019, respectively) 2021-2027 $ 99,716 $ 99,684 3.86% (net of unamortized debt issuance cost of $250 and $291 for 2020 and 2019, respectively) 2020-2025 71,179 85,423 4.86% (net of unamortized debt issuance cost of $117 and $147 for 2020 and 2019, respectively) 2020-2023 37,025 36,996 Total debt $ 207,920 $ 222,103 Less current maturities 37,857 23,571 Long-term debt $ 170,063 $ 198,532 The Company has a committed $350,000,000 multi-currency revolving credit agreement that expires on January 30, 2023. 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 September 30, 2020, the Company had outstanding letters of credit totaling $5,280,000 and no borrowings under the revolving credit agreement. There was $344,720,000 available under the revolving credit agreement as of September 30, 2020. The Company’s 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 $ and $ 283,956,000 at September 30, 2020 and December 31, 2019, respectively . |
Other, Net
Other, Net | 9 Months Ended |
Sep. 30, 2020 | |
Other Income And Expenses [Abstract] | |
Other, Net | 15. OTHER, NET Other, net in the consolidated statements of income included the following: (In thousands) Three Months Ended September 30 Nine Months Ended September 30 2020 2019 2020 2019 Foreign exchange gain $ 476 $ 374 $ 1,467 $ 333 Investment income 119 106 287 309 Realized and unrealized gain (loss) on investments 2,094 (324 ) 2,169 2,806 Net periodic pension benefit cost (60 ) 159 (119 ) 247 Gain on sale of asset — 570 — 570 Other, net $ 2,629 $ 885 $ 3,804 $ 4,265 |
Business Restructuring
Business Restructuring | 9 Months Ended |
Sep. 30, 2020 | |
Restructuring And Related Activities [Abstract] | |
Business Restructuring | 16. BUSINESS RESTRUCTURING In the first quarter of 2019, the Company approved a plan to restructure its Specialty Products office in the Netherlands and eliminate five positions from the site’s supply chain, quality control and research and development areas. This planned reduction in positions was made to better align the number of personnel with current business requirements and reduce costs at the site. As a result, severance and early lease termination expenses of $396,000 and $79,000, respectively, were recognized during the first quarter of 2019. During the third quarter of 2018, the Company approved a plan to shut down Surfactant operations at its German plant site. As of September 30, 2020, an aggregate of $2,392,000 shut down related expense has been recognized at the site. This aggregate expense is comprised of $1,404,000 of asset and spare part write downs recognized in 2018 and $988,000 of cumulative decommissioning costs. The Company recognized $169,000 in decommissioning expenses in the third quarter of 2019 and did not incur any decommissioning expenses in the third quarter of 2020. For the first nine months of 2020 and 2019, the Company recognized $79,000 and $564,000 of decommissioning expenses, respectively. In the fourth quarter of 2017, the Company approved a plan to restructure a portion of its Fieldsboro, New Jersey production facility. As a result, the Company recorded $915,000 of restructuring expense which reflected termination benefits for select plant employees. In the first quarter of 2019, the Company recognized a $251,000 favorable adjustment to the amount of termination benefits initially recorded. In May 2016, the Company announced plans to shut down its Longford Mills, Ontario, Canada (Longford Mills) manufacturing facility, a part of the Surfactant reportable segment, by December 31, 2016. The shutdown plan was implemented to improve the Company’s asset utilization in North America and to reduce the Company’s fixed cost base. Manufacturing operations of the Longford Mills plant ceased by the end of 2016, and production of goods manufactured at the facility was transferred to other Company North American production sites. Decommissioning of the assets is expected to continue throughout 2020. As of September 30, 2020, $8,113,000 of aggregate restructuring expense has been recognized, reflecting $1,644,000 of termination benefits for approximately 30 employees and $6,469,000 for other expenses, principally site decommissioning costs. The Company recognized $126,000 and $290,000 of decommissioning expenses in the third quarter of 2020 and 2019, respectively. The Company recognized $629,000 and $811,000 of decommissioning expenses in the first nine months of 2020 and 2019, respectively. |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Acquisitions | 17. ACQUISITIONS 2020 Clariant (Mexico) Acquisition On September 17, 2020, the Company through its subsidiaries in Mexico, acquired Clariant’s (Mexico) S.A. de C.V. anionic business and select sulfonation equipment located in Santa Clara, Mexico. The acquisition did not include the purchase of a manufacturing site. The business acquired will be integrated into the Company’s two existing manufacturing sites in Mexico (Matamoros and Ecatepec). The purchase price of the acquisition was $14,000,000, plus associated value-added taxes (VAT). As of September 30, 2020, $13,519,000, inclusive of $308,000 net VAT, had been paid with cash on hand. The acquisition was accounted for as a business combination and the assets were measured and recorded at their preliminary estimated fair value. The acquired goodwill is not tax deductible. All assets acquired are included in the Comp any’s Surfactants segment. The following table summarizes the preliminary purchase price allocation for the acquisition: (In thousands) September 30, 2020 Assets: Identifiable intangible assets: Customer lists $ 4,814 Trademarks and know-how 2,802 Non-compete agreement 1,000 Goodwill 4,595 Property, plant and equipment 789 Total assets acquired $ 14,000 Pro forma financial information has not been included because revenue and earnings of the Company’s consolidated entity would not have been materially different than reported had the acquisition date been January 1, 2019. Logos Technologies Acquisition On March 13, 2020, the Company acquired certain assets of Logos Technologies LLC's NatSurFact® business, a rhamnolipid-based line of bio-surfactants derived from renewable sources. These bio-surfactants offer synergies in several strategic end use markets including oilfield, agriculture, personal care and household, industrial and institutional. The acquisition was accounted for as an asset acquisition. The purchase price of the acquisition was $2,040,000 and was paid with cash on hand. All assets acquired are included in the Company’s Surfactants segment. The assets acquired were primarily intangibles, including trademarks and know-how ($1,392,000) and patents ($464,000). Additionally, $184,000 of laboratory equipment was acquired. 2019 Acquisition On December 17, 2019, the Company acquired an oilfield demulsifier product line. The purchase price of the acquisition was $9,000,000 and was paid with cash on hand. This acquisition was accounted for as a business combination and the assets were measured and recorded at their estimated fair values. The primary assets acquired were intangibles, mostly comprised of goodwill ($3,161,000), product know-how ($3,300,000) and customer relationships ($1,900,000). A small amount of inventory was also acquired. All of the acquired assets are included within the Company’s Surfactants segment. The average amortization period for the identifiable intangibles assets is 20 years. Pro forma financial information has not been included because revenues and earnings of the Company’s consolidated entity would not have been materially different than reported had the acquisition date been January 1, 2019. The acquired business did not impact the Company’s 2019 financial results. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Changes And Error Corrections [Abstract] | |
Recent Accounting Pronouncements | 18. RECENT ACCOUNTING PRONOUNCEMENTS In June 2016, the FASB issued ASU No. 2016-13 , Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, In January 2017, the FASB issued ASU No. 2017-4, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment quarter of 2020. The adoption of the guidance in ASU No. 2017-4 has not had an effect on the Company’s fi nancial position, results of operations or cash flows. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820) Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement In August 2018, the FASB issued ASU No. 2018-15, Intangibles-Goodwill and Other-Internal-Use software (Subtopic 350-40) Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract In August 2018, the FASB issued ASU No. 2018-14, Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20) In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848) Facilitation of the effect of reference rate reform on financial reporting. |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Changes And Error Corrections [Abstract] | |
Recent Accounting Pronouncements | In June 2016, the FASB issued ASU No. 2016-13 , Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, In January 2017, the FASB issued ASU No. 2017-4, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment quarter of 2020. The adoption of the guidance in ASU No. 2017-4 has not had an effect on the Company’s fi nancial position, results of operations or cash flows. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820) Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement In August 2018, the FASB issued ASU No. 2018-15, Intangibles-Goodwill and Other-Internal-Use software (Subtopic 350-40) Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract In August 2018, the FASB issued ASU No. 2018-14, Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20) In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848) Facilitation of the effect of reference rate reform on financial reporting. |
Reconciliations of Equity (Tabl
Reconciliations of Equity (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Reconciliations of Total Equity | Below are reconciliations of total equity, Company equity and equity attributable to noncontrolling interests for the three and nine months ended September 30, 2020 and 2019: (In thousands, except share and per share amounts) Total Common Stock Additional Paid-in Capital Treasury Stock Accumulated Other Comprehensive Income (Loss) Retained Earnings Noncontrolling Interest (1) Balance at June 30, 2020 898,261 26,552 198,947 (129,212 ) (172,203 ) 973,345 832 Issuance of 40,435 shares of common stock under stock option plan 2,443 40 2,403 — — — — Stock-based and deferred compensation 1,899 23 2,613 (737 ) — — — Net income 33,342 — — — — 33,168 174 Other comprehensive income 9,467 — — — 9,430 — 37 Cash dividends paid: Common stock ($0.28 per share) (6,176 ) — — — — (6,176 ) — Balance at September 30, 2020 $ 939,236 $ 26,615 $ 203,963 $ (129,949 ) $ (162,773 ) $ 1,000,337 $ 1,043 (In thousands, except share and per share amounts) Total Common Stock Additional Paid-in Capital Treasury Stock Accumulated Other Comprehensive Income (Loss) Retained Earnings Noncontrolling Interest (1) Balance at December 31, 2019 $ 892,496 $ 26,493 $ 193,135 $ (114,139 ) $ (136,170 ) $ 922,464 $ 713 Issuance of 47,115 shares of common stock under stock option plan 2,835 47 2,788 — — — — Purchase of 160,780 shares of common stock on the open market (13,753 ) — — (13,753 ) — — — Stock-based and deferred compensation 6,058 75 8,040 (2,057 ) — — — Net income 96,724 — — — — 96,420 304 Other comprehensive income (26,577 ) — — — (26,603 ) — 26 Cash dividends paid: Common stock ($0.84 per share) (18,547 ) — — — — (18,547 ) — Balance at September 30, 2020 $ 939,236 $ 26,615 $ 203,963 $ (129,949 ) $ (162,773 ) $ 1,000,337 $ 1,043 (In thousands, except share and per share amounts) Total Common Stock Additional Paid-in Capital Treasury Stock Accumulated Other Comprehensive Income (Loss) Retained Earnings Noncontrolling Interest (1) Balance at June 30, 2019 858,397 26,453 188,781 (106,202 ) (137,723 ) 886,349 739 Issuance of 13,256 shares of common stock under stock option plan 667 13 654 — — — — Purchase of 73,821 shares of common stock on the open market (7,003 ) — — (7,003 ) — — — Stock-based and deferred compensation 1,408 15 1,969 (576 ) — — — Net income 25,880 — — — — 25,889 (9 ) Other comprehensive income (18,816 ) — — — (18,784 ) — (32 ) Cash dividends paid: Common stock ($0.25 per share) (5,626 ) — — — — (5,626 ) — Balance at September 30, 2019 $ 854,907 $ 26,481 $ 191,404 $ (113,781 ) $ (156,507 ) $ 906,612 $ 698 (In thousands, except share and per share amounts) Total Common Stock Additional Paid-in Capital Treasury Stock Accumulated Other Comprehensive Income (Loss) Retained Earnings Noncontrolling Interest (1) Balance, December 31, 2018 $ 808,185 $ 26,309 $ 182,881 $ (97,389 ) $ (141,483 ) $ 837,107 $ 760 Issuance of 56,385 shares of common stock under stock option plan 2,830 56 2,774 — — — — Purchase of 144,457 shares of common stock on the open market (13,184 ) — — (13,184 ) — — — Stock-based and deferred compensation 2,657 116 5,749 (3,208 ) — — — Net income 81,068 — — — — 81,091 (23 ) Other comprehensive income (9,738 ) — — — (9,699 ) — (39 ) Cash dividends paid: Common stock ($0.75 per share) (16,911 ) — — — — (16,911 ) — Other (2) — — — — (5,325 ) 5,325 — Balance at September 30, 2019 $ 854,907 $ 26,481 $ 191,404 $ (113,781 ) $ (156,507 ) $ 906,612 $ 698 (1) (2) Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Values and Related Carrying Values of Debt | At September 30, 2020, and December 31, 2019, the fair values and related carrying values of debt, including current maturities, were as follows (the fair value and carrying value amounts are presented without regard to unamortized debt issuance costs of $651,000 and $754,000 as of September 30, 2020 and December 31, 2019, respectively): (In thousands) September 30, 2020 December 31, 2019 Fair value $ 218,764 $ 226,712 Carrying value 208,571 222,857 |
Financial Assets and Liabilities, Excluding Cash and Cash Equivalents, Measured on a Recurring Basis at Fair Value | The following tables present financial assets and liabilities, excluding cash and cash equivalents, measured on a recurring basis at fair value as of September 30, 2020, and December 31, 2019, and the level within the fair value hierarchy in which the fair value measurements fall: (In thousands) September 2020 Level 1 Level 2 Level 3 Mutual fund assets $ 28,285 $ 28,285 $ — $ — Derivative assets: Foreign currency contracts 28 — 28 — Total assets at fair value $ 28,313 $ 28,285 $ 28 $ — Derivative liabilities: Foreign currency contracts $ 924 $ — $ 924 $ — (In thousands) December 2019 Level 1 Level 2 Level 3 Mutual fund assets $ 28,227 $ 28,227 $ — $ — Derivative assets: Foreign currency contracts 981 — 981 — Total assets at fair value $ 29,208 $ 28,227 $ 981 $ — Derivative liabilities: Foreign currency contracts $ 429 $ — $ 429 $ — |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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 September 30 Nine Months Ended September 30 2020 2019 2020 2019 $ 3,223 $ 2,273 $ 7,414 $ 7,045 |
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) September 30, 2020 December 31, 2019 Stock options $ 2,441 $ 1,850 Stock awards 5,518 3,618 SARs 5,314 4,058 |
Share Based Payment Awards Granted in Period | The increases in unrecognized compensation costs for stock options, stock awards and SARs reflected the 2020 grants of: Shares Stock options 81,734 Stock awards (at target) 43,518 SARs 175,760 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Composition of Inventories | The composition of inventories at September 30, 2020, and December 31, 2019, was as follows: (In thousands) September 30, 2020 December 31, 2019 Finished goods $ 143,964 $ 139,785 Raw materials 58,351 63,862 Total inventories $ 202,315 $ 203,647 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Schedule of Lease Cost and Other Information | (In thousands) Three months ended September 30, 2020 Nine months ended September 30, 2020 Lease Cost Operating lease cost $ 3,101 $ 8,583 Short-term lease cost 1,105 3,488 Variable lease cost 203 802 Total lease cost $ 4,409 $ 12,873 Other Information Cash paid for amounts included in the measurement of lease liabilities: Operating cash flow from operating leases $ 3,124 $ 8,658 Right-of-use assets obtained in exchange for new operating lease liabilities 3,666 5,160 |
Schedule of Lease Liability Payments | (In thousands) Undiscounted Cash Flows: 2020 (excluding the nine months ended September 30, 2020) $ 3,072 2021 10,666 2022 8,641 2023 6,091 2024 3,602 Subsequent to 2024 17,117 Total Undiscounted Cash Flows $ 49,189 Less: Imputed interest (9,761 ) Present value $ 39,428 Current operating lease liabilities (1) 9,938 Non-current operating lease liabilities 29,490 Total lease liabilities $ 39,428 (1) This item is included in Accrued liabilities line on the Company’s Condensed Consolidated Balance Sheet. |
Schedule of Operating Leases Weighted Average, Remaining Lease Term and Discount Rate | Weighted-average remaining lease term-operating leases 8 Years Weighted-average discount rate-operating leases 4.0% |
Postretirement Benefit Plans (T
Postretirement Benefit Plans (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Compensation And Retirement Disclosure [Abstract] | |
Components of Net Periodic Benefit Cost | Components of Net Periodic Benefit Cost UNITED STATES (In thousands) Three Months Ended September 30 Nine Months Ended September 30 2020 2019 2020 2019 Interest cost $ 1,409 $ 1,640 $ 4,251 $ 4,962 Expected return on plan assets (2,435 ) (2,365 ) (7,309 ) (7,087 ) Amortization of net actuarial loss 1,092 563 3,196 1,867 Net periodic benefit cost (income) $ 66 $ (162 ) $ 138 $ (258 ) UNITED KINGDOM (In thousands) Three Months Ended September 30 Nine Months Ended September 30 2020 2019 2020 2019 Interest cost $ 111 $ 134 $ 327 $ 416 Expected return on plan assets (137 ) (190 ) (404 ) (589 ) Amortization of net actuarial loss 20 59 58 184 Net periodic benefit cost (income) $ (6 ) $ 3 $ (19 ) $ 11 |
Defined Contribution Plan Expenses for Company's Qualified Contribution Plans | Defined contribution plan expenses for the Company’s qualified contribution plans were as follows: (In thousands) Three Months Ended September 30 Nine Months Ended September 30 2020 2019 2020 2019 Retirement savings contributions $ 1,813 $ 1,777 $ 5,521 $ 5,401 Profit sharing contributions plan 1,633 567 4,090 2,413 Total $ 3,446 $ 2,344 $ 9,611 $ 7,814 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Computations of Basic and Diluted Earnings Per Share | Below are the computations of basic and diluted earnings per share for the three and nine months ended September 30, 2020 and 2019: (In thousands, except per share amounts) Three Months Ended September 30 Nine Months Ended September 30 2020 2019 2020 2019 Computation of Basic Earnings per Share Net income attributable to Stepan Company $ 33,168 $ 25,889 $ 96,420 $ 81,091 Weighted-average number of common shares outstanding 22,907 23,025 22,951 23,070 Basic earnings per share $ 1.45 $ 1.12 $ 4.20 $ 3.52 Computation of Diluted Earnings per Share Net income attributable to Stepan Company $ 33,168 $ 25,889 $ 96,420 $ 81,091 Weighted-average number of shares outstanding 22,907 23,025 22,951 23,070 Add weighted-average net shares from assumed exercise of options (under treasury stock method) (1) 119 102 107 95 Add weighted-average net shares related to unvested stock awards (under treasury stock method) 1 1 1 2 Add weighted-average net shares from assumed exercise of SARs (under treasury stock method) (1) 164 135 139 120 Add weighted-average contingently issuable net shares related to performance stock awards (under treasury stock method) 46 37 38 33 Weighted-average shares applicable to diluted earnings 23,237 23,300 23,236 23,320 Diluted earnings per share $ 1.43 $ 1.11 $ 4.15 $ 3.48 (1) September September |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Summary of Changes in Accumulated Other Comprehensive Income | Below is the change in the Company’s AOCI balance by component (net of income taxes) for the three and nine months ended September 30, 2020 and 2019: (In thousands) Foreign Currency Translation Adjustments Defined Benefit Pension Plan Adjustments Cash Flow Hedge Adjustments Total Balance at June 30, 2019 $ (100,477 ) $ (37,323 ) $ 77 $ (137,723 ) Other comprehensive income before reclassifications (19,255 ) — — (19,255 ) Amounts reclassified from AOCI — 473 (2 ) 471 Net current-period other comprehensive income (19,255 ) 473 (2 ) (18,784 ) Balance at September 30, 2019 $ (119,732 ) $ (36,850 ) $ 75 $ (156,507 ) Balance at June 30, 2020 $ (141,682 ) $ (30,589 ) $ 68 $ (172,203 ) Other comprehensive income before reclassifications 8,594 — — 8,594 Amounts reclassified from AOCI — 839 (3 ) 836 Net current-period other comprehensive income 8,594 839 (3 ) 9,430 Balance at September 30, 2020 $ (133,088 ) $ (29,750 ) $ 65 $ (162,773 ) Balance at December 31, 2018 $ (108,481 ) $ (33,083 ) $ 81 $ (141,483 ) Other comprehensive income before reclassifications (11,251 ) — — (11,251 ) Amounts reclassified from AOCI — 1,558 (6 ) 1,552 Remeasurement adjustment related to the Tax Act (1) — (5,325 ) — (5,325 ) Net current-period other comprehensive income (11,251 ) (3,767 ) (6 ) (15,024 ) Balance at September 30, 2019 $ (119,732 ) $ (36,850 ) $ 75 $ (156,507 ) Balance at December 31, 2019 $ (104,037 ) $ (32,205 ) $ 72 $ (136,170 ) Other comprehensive income before reclassifications (29,051 ) — — (29,051 ) Amounts reclassified from AOCI — 2,455 (7 ) 2,448 Net current-period other comprehensive income (29,051 ) 2,455 (7 ) (26,603 ) Balance at September 30, 2020 $ (133,088 ) $ (29,750 ) $ 65 $ (162,773 ) (1) Represents reclassification of the stranded tax effects resulting from the U.S. Tax Cuts and Jobs Act (Tax Act) from accumulated other comprehensive income (loss) to retained earnings in accordance with ASU 2018-02. |
Summary of Amounts Reclassifications Out of Accumulated Other Comprehensive Income | Information regarding the reclassifications out of AOCI for the three- and nine-month periods ended September 30, 2020 and 2019, is displayed below: (In thousands) Amount Reclassified from AOCI (a) AOCI Components Three Months Ended September 30 Nine Months Ended September 30 Affected Line Item in Consolidated Statements of Income 2020 2019 2020 2019 Amortization of defined benefit pension actuarial losses $ (1,111 ) $ (622 ) $ (3,253 ) $ (2,051 ) (b) 272 149 798 493 Tax benefit $ (839 ) $ (473 ) $ (2,455 ) $ (1,558 ) Net of tax Gains and losses on cash flow hedges: Foreign exchange contracts 3 2 7 6 Cost of sales 3 2 7 6 Total before tax — — — — Tax benefit $ 3 $ 2 $ 7 $ 6 Net of tax Total reclassifications for the period $ (836 ) $ (471 ) $ (2,448 ) $ (1,552 ) 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 9 for additional details). |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Operating Segment | The Company has three reportable segments: Surfactants, Polymers and Specialty Products. Net sales by segment for the three and nine months ended September 30, 2020 and 2019, were as follows: (In thousands) Three Months Ended September 30 Nine Months Ended September 30 2020 2019 2020 2019 Segment Net Sales Surfactants $ 333,839 $ 299,719 $ 993,245 $ 962,749 Polymers 116,682 135,089 335,582 395,904 Specialty Products 13,959 16,774 46,189 55,102 Total $ 464,480 $ 451,582 $ 1,375,016 $ 1,413,755 |
Reconciliation of Segment Information to Income Before Provision for Income Taxes | Segment operating income and reconciliations of segment operating income to income before provision for income taxes for the three and nine months ended September 30, 2020 and 2019, are summarized below: (In thousands) Three Months Ended September 30 Nine Months Ended September 30 2020 2019 2020 2019 Segment Operating Income Surfactants $ 41,151 $ 19,660 $ 125,810 $ 88,913 Polymers 22,387 23,283 45,430 58,148 Specialty Products 1,593 2,261 8,803 11,374 Segment operating income 65,131 45,204 180,043 158,435 Business restructuring (126 ) (459 ) (708 ) (1,642 ) Unallocated corporate expenses (1) (22,610 ) (16,779 ) (52,313 ) (58,024 ) Consolidated operating income 42,395 27,966 127,022 98,769 Interest expense, net (1,626 ) (1,402 ) (4,115 ) (5,021 ) Other, net 2,629 885 3,804 4,265 Income before provision for income taxes $ 43,398 $ 27,449 $ 126,711 $ 98,013 (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. |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Revenue From Contract With Customer [Abstract] | |
Geographic Disaggregation of Net Sales | The tables below provide a geographic disaggregation of net sales for the three and nine months ended September 30, 2020 and 2019. The Company’s business segmentation by geographic region most effectively captures the nature and economic characteristics of the Company’s revenue streams impacted by economic factors. For the Three Months Ended September 30, 2020 (In thousands) Surfactants Polymers Specialty Products Total Geographic Market North America $ 202,121 $ 68,635 $ 12,060 $ 282,816 Europe 56,468 38,337 1,899 96,704 Latin America 60,393 723 — 61,116 Asia 14,857 8,987 — 23,844 Total $ 333,839 $ 116,682 $ 13,959 $ 464,480 For the Three Months Ended September 30, 2019 (In thousands) Surfactants Polymers Specialty Products Total Geographic Market North America $ 178,799 $ 84,397 $ 14,035 $ 277,231 Europe 57,190 39,852 2,739 99,781 Latin America 51,940 792 — 52,732 Asia 11,790 10,048 — 21,838 Total $ 299,719 $ 135,089 $ 16,774 $ 451,582 For the Nine Months Ended September 30, 2020 (In thousands) Surfactants Polymers Specialty Products Total Geographic Market North America $ 617,638 $ 199,256 $ 38,883 $ 855,777 Europe 171,940 107,589 7,306 286,835 Latin America 163,097 1,825 — 164,922 Asia 40,570 26,912 — 67,482 Total $ 993,245 $ 335,582 $ 46,189 $ 1,375,016 For the Nine Months Ended September 30, 2019 (In thousands) Surfactants Polymers Specialty Products Total Geographic Market North America $ 584,816 $ 242,154 $ 46,127 $ 873,097 Europe 183,028 126,042 8,975 318,045 Latin America 156,709 2,439 — 159,148 Asia 38,196 25,269 — 63,465 Total $ 962,749 $ 395,904 $ 55,102 $ 1,413,755 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt | At September 30, 2020, and December 31, 2019, debt was comprised of the following: (In thousands) Maturity Dates September 30, 2020 December 31, 2019 Unsecured private placement notes 3.95% (net of unamortized debt issuance cost of $284 and $316 for 2020 and 2019, respectively) 2021-2027 $ 99,716 $ 99,684 3.86% (net of unamortized debt issuance cost of $250 and $291 for 2020 and 2019, respectively) 2020-2025 71,179 85,423 4.86% (net of unamortized debt issuance cost of $117 and $147 for 2020 and 2019, respectively) 2020-2023 37,025 36,996 Total debt $ 207,920 $ 222,103 Less current maturities 37,857 23,571 Long-term debt $ 170,063 $ 198,532 |
Other, Net (Tables)
Other, Net (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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 September 30 Nine Months Ended September 30 2020 2019 2020 2019 Foreign exchange gain $ 476 $ 374 $ 1,467 $ 333 Investment income 119 106 287 309 Realized and unrealized gain (loss) on investments 2,094 (324 ) 2,169 2,806 Net periodic pension benefit cost (60 ) 159 (119 ) 247 Gain on sale of asset — 570 — 570 Other, net $ 2,629 $ 885 $ 3,804 $ 4,265 |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
2020 Acquisitions [Member] | |
Business Acquisition [Line Items] | |
Summary of Preliminary Purchase Price Allocation for Acquisition | The following table summarizes the preliminary purchase price allocation for the acquisition: (In thousands) September 30, 2020 Assets: Identifiable intangible assets: Customer lists $ 4,814 Trademarks and know-how 2,802 Non-compete agreement 1,000 Goodwill 4,595 Property, plant and equipment 789 Total assets acquired $ 14,000 |
Reconciliations of Equity - Rec
Reconciliations of Equity - Reconciliations of Total Equity (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | ||
Reconciliations of total equity | |||||
Beginning Balance | $ 898,261 | $ 858,397 | $ 892,496 | $ 808,185 | |
Issuance of common stock under stock option plan | 2,443 | 667 | 2,835 | 2,830 | |
Purchase of common stock on the open market | (7,003) | (13,753) | (13,184) | ||
Stock-based and deferred compensation | 1,899 | 1,408 | 6,058 | 2,657 | |
Net income | 33,342 | 25,880 | 96,724 | 81,068 | |
Other comprehensive income | 9,467 | (18,816) | (26,577) | (9,738) | |
Cash dividends paid: | |||||
Common stock | (6,176) | (5,626) | (18,547) | (16,911) | |
Ending Balance | 939,236 | 854,907 | 939,236 | 854,907 | |
Common Stock [Member] | |||||
Reconciliations of total equity | |||||
Beginning Balance | 26,552 | 26,453 | 26,493 | 26,309 | |
Issuance of common stock under stock option plan | 40 | 13 | 47 | 56 | |
Stock-based and deferred compensation | 23 | 15 | 75 | 116 | |
Cash dividends paid: | |||||
Ending Balance | 26,615 | 26,481 | 26,615 | 26,481 | |
Additional Paid-in Capital [Member] | |||||
Reconciliations of total equity | |||||
Beginning Balance | 198,947 | 188,781 | 193,135 | 182,881 | |
Issuance of common stock under stock option plan | 2,403 | 654 | 2,788 | 2,774 | |
Stock-based and deferred compensation | 2,613 | 1,969 | 8,040 | 5,749 | |
Cash dividends paid: | |||||
Ending Balance | 203,963 | 191,404 | 203,963 | 191,404 | |
Treasury Stock [Member] | |||||
Reconciliations of total equity | |||||
Beginning Balance | (129,212) | (106,202) | (114,139) | (97,389) | |
Purchase of common stock on the open market | (7,003) | (13,753) | (13,184) | ||
Stock-based and deferred compensation | (737) | (576) | (2,057) | (3,208) | |
Cash dividends paid: | |||||
Ending Balance | (129,949) | (113,781) | (129,949) | (113,781) | |
Accumulated Other Comprehensive Income (Loss) [Member] | |||||
Reconciliations of total equity | |||||
Beginning Balance | (172,203) | (137,723) | (136,170) | (141,483) | |
Other comprehensive income | 9,430 | (18,784) | (26,603) | (9,699) | |
Cash dividends paid: | |||||
Other | [1] | (5,325) | |||
Ending Balance | (162,773) | (156,507) | (162,773) | (156,507) | |
Retained Earnings [Member] | |||||
Reconciliations of total equity | |||||
Beginning Balance | 973,345 | 886,349 | 922,464 | 837,107 | |
Net income | 33,168 | 25,889 | 96,420 | 81,091 | |
Cash dividends paid: | |||||
Common stock | (6,176) | (5,626) | (18,547) | (16,911) | |
Other | [1] | 5,325 | |||
Ending Balance | 1,000,337 | 906,612 | 1,000,337 | 906,612 | |
Noncontrolling Interest [Member] | |||||
Reconciliations of total equity | |||||
Beginning Balance | [2] | 832 | 739 | 713 | 760 |
Net income | [2] | 174 | (9) | 304 | (23) |
Other comprehensive income | [2] | 37 | (32) | 26 | (39) |
Cash dividends paid: | |||||
Ending Balance | [2] | $ 1,043 | $ 698 | $ 1,043 | $ 698 |
[1] | Reflects beginning retained earnings adjustment as a result of the Company’s first quarter 2019 adoption of ASU No. 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income | ||||
[2] | Reflects the noncontrolling interest in the Company’s China joint venture. |
Reconciliations of Equity - R_2
Reconciliations of Equity - Reconciliations of Total Equity (Parenthetical) (Detail) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Number of shares of common stock issued under stock option plan | 40,435 | 13,256 | 47,115 | 56,385 |
Number of common stock shares purchased on open market | 73,821 | 160,780 | 144,457 | |
Common stock | $ 0.28 | $ 0.25 | $ 0.84 | $ 0.75 |
Common Stock [Member] | ||||
Number of shares of common stock issued under stock option plan | 40,435 | 13,256 | 47,115 | 56,385 |
Additional Paid-in Capital [Member] | ||||
Number of shares of common stock issued under stock option plan | 40,435 | 13,256 | 47,115 | 56,385 |
Treasury Stock [Member] | ||||
Number of common stock shares purchased on open market | 73,821 | 160,780 | 144,457 | |
Retained Earnings [Member] | ||||
Common stock | $ 0.28 | $ 0.25 | $ 0.84 | $ 0.75 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Fair Value Disclosures [Abstract] | ||
Unamortized debt issuance cost | $ 651,000 | $ 754,000 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Values and Related Carrying Values of Debt (Detail) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Carrying value | $ 208,571 | $ 222,857 |
Level 2 [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fair value | $ 218,764 | $ 226,712 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Assets and Liabilities, Excluding Cash and Cash Equivalents, Measured on a Recurring Basis at Fair Value (Detail) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Mutual fund assets | $ 28,285 | $ 28,227 |
Derivative assets: | ||
Foreign currency contracts | 28 | 981 |
Total assets at fair value | 28,313 | 29,208 |
Derivative liabilities: | ||
Foreign currency contracts | 924 | 429 |
Level 1 [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Mutual fund assets | 28,285 | 28,227 |
Derivative assets: | ||
Total assets at fair value | 28,285 | 28,227 |
Level 2 [Member] | ||
Derivative assets: | ||
Foreign currency contracts | 28 | 981 |
Total assets at fair value | 28 | 981 |
Derivative liabilities: | ||
Foreign currency contracts | $ 924 | $ 429 |
Derivative Instruments - Additi
Derivative Instruments - Additional Information (Detail) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Derivative Instruments And Hedging Activities Disclosures [Line Items] | ||
Derivative notional amount | $ 46,721,506 | $ 48,540,368 |
Minimum [Member] | ||
Derivative Instruments And Hedging Activities Disclosures [Line Items] | ||
Derivative foreign currency exchange contracts durations | 1 month | |
Maximum [Member] | ||
Derivative Instruments And Hedging Activities Disclosures [Line Items] | ||
Derivative foreign currency exchange contracts durations | 3 months |
Stock-based Compensation - Addi
Stock-based Compensation - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2020 | |
Stock Option and Stock Appreciation Rights (SARs) Granted Prior to 2017 [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Vesting period | 2 years |
Stock Option and Stock Appreciation Rights (SARS) Granted in 2017 [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Vesting period | 3 years |
Percentage of awards vesting in each year | 33.33% |
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 9 months 18 days |
Stock Awards [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Weighted average period for amortization of unrecognized compensation cost | 1 year 10 months 24 days |
SARs [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Weighted average period for amortization of unrecognized compensation cost | 1 year 9 months 18 days |
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 | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||||
Compensation expense | $ 3,223 | $ 2,273 | $ 7,414 | $ 7,045 |
Stock-based Compensation - Unre
Stock-based Compensation - Unrecognized Compensation Costs for Stock Options, Stock Awards and SARs (Detail) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Stock Option [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Unrecognized compensation costs for stock options, stock awards and SARs | $ 2,441 | $ 1,850 |
Stock Awards [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Unrecognized compensation costs for stock options, stock awards and SARs | 5,518 | 3,618 |
SARs [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Unrecognized compensation costs for stock options, stock awards and SARs | $ 5,314 | $ 4,058 |
Stock-based Compensation - Shar
Stock-based Compensation - Share Based Payment Awards Granted in Period (Detail) | 9 Months Ended |
Sep. 30, 2020shares | |
Stock Option [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Stock options granted in period | 81,734 |
Stock Awards (at target) [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Awards granted in period | 43,518 |
SARs [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Awards granted in period | 175,760 |
Inventories - Composition of In
Inventories - Composition of Inventories (Detail) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 143,964 | $ 139,785 |
Raw materials | 58,351 | 63,862 |
Total inventories | $ 202,315 | $ 203,647 |
Leases - Additional Information
Leases - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2020Country | |
Operating Leased Assets [Line Items] | |
Number of countries leases reside | 5 |
Percentage of value of leases property | 97.00% |
Minimum [Member] | |
Operating Leased Assets [Line Items] | |
Lessee, operating lease, term of contract | 1 year |
Maximum [Member] | |
Operating Leased Assets [Line Items] | |
Lessee, operating lease, term of contract | 10 years |
Railcars [Member] | |
Operating Leased Assets [Line Items] | |
Percentage of lease asset categories | 43.00% |
Real Estate [Member] | |
Operating Leased Assets [Line Items] | |
Percentage of lease asset categories | 34.00% |
Real Estate [Member] | Minimum [Member] | |
Operating Leased Assets [Line Items] | |
Lessee, operating lease, term of contract | 1 year |
Real Estate [Member] | Maximum [Member] | |
Operating Leased Assets [Line Items] | |
Lessee, operating lease, term of contract | 50 years |
Leases - Schedule of Lease Cost
Leases - Schedule of Lease Cost and Other Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020 | Sep. 30, 2020 | |
Lease Cost | ||
Operating lease cost | $ 3,101 | $ 8,583 |
Short-term lease cost | 1,105 | 3,488 |
Variable lease cost | 203 | 802 |
Total lease cost | 4,409 | 12,873 |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flow from operating leases | 3,124 | 8,658 |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 3,666 | $ 5,160 |
Leases - Schedule of Lease Liab
Leases - Schedule of Lease Liability Payments (Detail) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
2020 (excluding the nine months ended September 30, 2020) | $ 3,072 | |
2021 | 10,666 | |
2022 | 8,641 | |
2023 | 6,091 | |
2024 | 3,602 | |
Subsequent to 2024 | 17,117 | |
Total Undiscounted Cash Flows | 49,189 | |
Less: Imputed interest | (9,761) | |
Present value | 39,428 | |
Current operating lease liabilities | 9,938 | |
Non-current operating lease liabilities | 29,490 | $ 29,654 |
Total lease liabilities | $ 39,428 |
Leases - Schedule of Operating
Leases - Schedule of Operating Leases Weighted Average, Remaining Lease Term and Discount Rate (Detail) | Sep. 30, 2020 |
Leases [Abstract] | |
Weighted-average remaining lease term-operating leases | 8 years |
Weighted-average discount rate-operating leases | 4.00% |
Contingencies - Additional Info
Contingencies - Additional Information (Detail) - USD ($) | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Site Contingency [Line Items] | |||
Environmental losses accrual | $ 22,448,000 | $ 25,905,000 | |
Cash expenditures related to legal and environmental matters | $ 3,781,000 | $ 2,826,000 | |
Contribution for future response costs | 5.00% | ||
Wilmington Site [Member] | |||
Site Contingency [Line Items] | |||
Payment of environmental response costs | $ 2,965,000 | ||
Minimum [Member] | |||
Site Contingency [Line Items] | |||
Environmental and legal losses | 22,448,000 | ||
Maximum [Member] | |||
Site Contingency [Line Items] | |||
Environmental and legal losses | $ 41,146,000 |
Postretirement Benefit Plans -
Postretirement Benefit Plans - Components of Net Periodic Benefit Cost (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Net periodic benefit cost (income) | $ 60 | $ (159) | $ 119 | $ (247) |
United States [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Interest cost | 1,409 | 1,640 | 4,251 | 4,962 |
Expected return on plan assets | (2,435) | (2,365) | (7,309) | (7,087) |
Amortization of net actuarial loss | 1,092 | 563 | 3,196 | 1,867 |
Net periodic benefit cost (income) | 66 | (162) | 138 | (258) |
United Kingdom [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Interest cost | 111 | 134 | 327 | 416 |
Expected return on plan assets | (137) | (190) | (404) | (589) |
Amortization of net actuarial loss | 20 | 59 | 58 | 184 |
Net periodic benefit cost (income) | $ (6) | $ 3 | $ (19) | $ 11 |
Postretirement Benefit Plans _2
Postretirement Benefit Plans - Defined Benefit Pension Plans - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Defined Contribution Plans [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Balance of trust assets | $ 1,604,000 |
United States [Member] | Unfunded Plan [Member] | Non-qualified Plans [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Expected contributions or payments to defined benefit plans | 299,000 |
Employer contributions or payments | 247,000 |
U.K Plans [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Expected contributions or payments to defined benefit plans | 495,000 |
Employer contributions or payments | $ 434,000 |
Postretirement Benefit Plans _3
Postretirement Benefit Plans - Defined Contribution Plan Expenses for Company's Qualified Contribution Plans (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Defined Contribution Plan Disclosure [Line Items] | ||||
Total defined contribution plan expenses | $ 3,446 | $ 2,344 | $ 9,611 | $ 7,814 |
Retirement Savings Contributions [Member] | ||||
Defined Contribution Plan Disclosure [Line Items] | ||||
Total defined contribution plan expenses | 1,813 | 1,777 | 5,521 | 5,401 |
Profit Sharing Contributions Plan [Member] | ||||
Defined Contribution Plan Disclosure [Line Items] | ||||
Total defined contribution plan expenses | $ 1,633 | $ 567 | $ 4,090 | $ 2,413 |
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 | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | ||
Computation of Basic Earnings per Share | |||||
Net income attributable to Stepan Company | $ 33,168 | $ 25,889 | $ 96,420 | $ 81,091 | |
Weighted-average number of common shares outstanding | 22,907 | 23,025 | 22,951 | 23,070 | |
Basic earnings per share | $ 1.45 | $ 1.12 | $ 4.20 | $ 3.52 | |
Computation of Diluted Earnings per Share | |||||
Net income attributable to Stepan Company | $ 33,168 | $ 25,889 | $ 96,420 | $ 81,091 | |
Weighted-average number of common shares outstanding | 22,907 | 23,025 | 22,951 | 23,070 | |
Add weighted-average net shares related to unvested stock awards (under treasury stock method) | 1 | 1 | 1 | 2 | |
Weighted-average shares applicable to diluted earnings | 23,237 | 23,300 | 23,236 | 23,320 | |
Diluted earnings per share | $ 1.43 | $ 1.11 | $ 4.15 | $ 3.48 | |
Stock Option [Member] | |||||
Computation of Diluted Earnings per Share | |||||
Add weighted-average net shares from assumed exercise of options (under treasury stock method) | [1] | 119 | 102 | 107 | 95 |
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) | [1] | 164 | 135 | 139 | 120 |
Performance Stock Award [Member] | |||||
Computation of Diluted Earnings per Share | |||||
Add weighted-average net shares from assumed exercise of options (under treasury stock method) | 46 | 37 | 38 | 33 | |
[1] | Options/SARs to acquire 169,912 shares of Company common stock were excluded from the computations of diluted earnings per share for the nine months ended September September |
Earnings Per Share - Computat_2
Earnings Per Share - Computations of Basic and Diluted Earnings Per Share (Parenthetical) (Detail) - shares | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Options and Stock Appreciation Rights (SARs) [Member] | ||
Earnings Per Share Basic [Line Items] | ||
Options/SARs to purchase shares of common stock were excluded from the computations of diluted earnings per share | 169,912 | 142,833 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) - Summary of Changes in Accumulated Other Comprehensive Income (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Beginning Balance | $ 891,783 | |||
Other comprehensive income before reclassifications | $ 8,594 | $ (19,255) | (29,051) | $ (11,251) |
Amounts reclassified from AOCI | 836 | 471 | 2,448 | 1,552 |
Remeasurement adjustment related to the Tax Act (1) | (5,325) | |||
Net current-period other comprehensive income | 9,430 | (18,784) | (26,603) | (15,024) |
Ending Balance | 938,193 | 938,193 | ||
Foreign Currency Translation Adjustments [Member] | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Beginning Balance | (141,682) | (100,477) | (104,037) | (108,481) |
Other comprehensive income before reclassifications | 8,594 | (19,255) | (29,051) | (11,251) |
Net current-period other comprehensive income | 8,594 | (19,255) | (29,051) | (11,251) |
Ending Balance | (133,088) | (119,732) | (133,088) | (119,732) |
Defined Benefit Pension Plan Adjustments [Member] | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Beginning Balance | (30,589) | (37,323) | (32,205) | (33,083) |
Amounts reclassified from AOCI | 839 | 473 | 2,455 | 1,558 |
Remeasurement adjustment related to the Tax Act (1) | (5,325) | |||
Net current-period other comprehensive income | 839 | 473 | 2,455 | (3,767) |
Ending Balance | (29,750) | (36,850) | (29,750) | (36,850) |
Cash Flow Hedge Adjustments [Member] | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Beginning Balance | 68 | 77 | 72 | 81 |
Amounts reclassified from AOCI | (3) | (2) | (7) | (6) |
Net current-period other comprehensive income | (3) | (2) | (7) | (6) |
Ending Balance | 65 | 75 | 65 | 75 |
AOCI Attributable to Parent [Member] | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Beginning Balance | (172,203) | (137,723) | (136,170) | (141,483) |
Ending Balance | $ (162,773) | $ (156,507) | $ (162,773) | $ (156,507) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income (Loss) - Summary of Amounts Reclassifications Out of Accumulated Other Comprehensive Income (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | ||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||||
Income Before Provision for Income Taxes | $ 43,398 | $ 27,449 | $ 126,711 | $ 98,013 | |
Tax benefit | (10,056) | (1,569) | (29,987) | (16,945) | |
Cost of Sales | 367,423 | 374,180 | 1,100,195 | 1,158,785 | |
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] | (1,111) | (622) | (3,253) | (2,051) |
Tax benefit | [1] | 272 | 149 | 798 | 493 |
Income applicable to common stock | [1] | (839) | (473) | (2,455) | (1,558) |
Cash Flow Hedge Adjustments [Member] | Amounts Reclassified From Accumulated Other Comprehensive Income [Member] | |||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||||
Income Before Provision for Income Taxes | [1] | 3 | 2 | 7 | 6 |
Income applicable to common stock | [1] | 3 | 2 | 7 | 6 |
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 | 2 | 7 | 6 |
Accumulated Other Comprehensive Income (Loss) [Member] | |||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||||
Income applicable to common stock | [1] | $ (836) | $ (471) | $ (2,448) | $ (1,552) |
[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 9 for additional details). |
Segment Reporting - Additional
Segment Reporting - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2020Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
Segment Reporting - Operating S
Segment Reporting - Operating Segment (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Segment Reporting Information [Line Items] | ||||
Net sales | $ 464,480 | $ 451,582 | $ 1,375,016 | $ 1,413,755 |
Surfactants [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 333,839 | 299,719 | 993,245 | 962,749 |
Polymers [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 116,682 | 135,089 | 335,582 | 395,904 |
Specialty Products [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | $ 13,959 | $ 16,774 | $ 46,189 | $ 55,102 |
Segment Reporting - Reconciliat
Segment Reporting - Reconciliation of Segment Information to Income Before Provision for Income Taxes (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | ||
Segment Reporting Information [Line Items] | |||||
Operating Income | $ 42,395 | $ 27,966 | $ 127,022 | $ 98,769 | |
Business restructuring | (126) | (459) | (708) | (1,642) | |
Interest expense, net | (1,626) | (1,402) | (4,115) | (5,021) | |
Other, net | 2,629 | 885 | 3,804 | 4,265 | |
Income Before Provision for Income Taxes | 43,398 | 27,449 | 126,711 | 98,013 | |
Operating Segments [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Operating Income | 65,131 | 45,204 | 180,043 | 158,435 | |
Operating Segments [Member] | Surfactants [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Operating Income | 41,151 | 19,660 | 125,810 | 88,913 | |
Operating Segments [Member] | Polymers [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Operating Income | 22,387 | 23,283 | 45,430 | 58,148 | |
Operating Segments [Member] | Specialty Products [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Operating Income | 1,593 | 2,261 | 8,803 | 11,374 | |
Segment Reconciling Items [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Unallocated corporate expenses | [1] | $ (22,610) | $ (16,779) | $ (52,313) | $ (58,024) |
[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. |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Additional Information (Detail) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Sep. 30, 2020 | |
Revenue From Contract With Customer [Abstract] | ||
Contract assets | $ 0 | |
Contract liabilities | $ 438,000 | |
Contract liabilities revenue recognized | $ 350,000 |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Summary of Geographic Disaggregation of Net Sales (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disaggregation Of Revenue [Line Items] | ||||
Net sales | $ 464,480 | $ 451,582 | $ 1,375,016 | $ 1,413,755 |
Surfactants [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | 333,839 | 299,719 | 993,245 | 962,749 |
Polymers [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | 116,682 | 135,089 | 335,582 | 395,904 |
Specialty Products [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | 13,959 | 16,774 | 46,189 | 55,102 |
North America [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | 282,816 | 277,231 | 855,777 | 873,097 |
North America [Member] | Surfactants [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | 202,121 | 178,799 | 617,638 | 584,816 |
North America [Member] | Polymers [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | 68,635 | 84,397 | 199,256 | 242,154 |
North America [Member] | Specialty Products [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | 12,060 | 14,035 | 38,883 | 46,127 |
Europe [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | 96,704 | 99,781 | 286,835 | 318,045 |
Europe [Member] | Surfactants [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | 56,468 | 57,190 | 171,940 | 183,028 |
Europe [Member] | Polymers [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | 38,337 | 39,852 | 107,589 | 126,042 |
Europe [Member] | Specialty Products [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | 1,899 | 2,739 | 7,306 | 8,975 |
Latin America [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | 61,116 | 52,732 | 164,922 | 159,148 |
Latin America [Member] | Surfactants [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | 60,393 | 51,940 | 163,097 | 156,709 |
Latin America [Member] | Polymers [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | 723 | 792 | 1,825 | 2,439 |
Latin America [Member] | Specialty Products [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | 0 | 0 | 0 | 0 |
Asia [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | 23,844 | 21,838 | 67,482 | 63,465 |
Asia [Member] | Surfactants [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | 14,857 | 11,790 | 40,570 | 38,196 |
Asia [Member] | Polymers [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | 8,987 | 10,048 | 26,912 | 25,269 |
Asia [Member] | Specialty Products [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | $ 0 | $ 0 | $ 0 | $ 0 |
Debt - Debt (Detail)
Debt - Debt (Detail) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | ||
Total debt | $ 207,920 | $ 222,103 |
Less current maturities | 37,857 | 23,571 |
Long-term debt | 170,063 | 198,532 |
Unsecured private placement 3.95% note [Member] | ||
Debt Instrument [Line Items] | ||
Total debt | $ 99,716 | $ 99,684 |
Debt instrument interest rate percentage | 3.95% | 3.95% |
Unsecured private placement 3.95% note [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Maturity Dates | 2021 | 2021 |
Unsecured private placement 3.95% note [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Maturity Dates | 2027 | 2027 |
Unsecured private placement 3.86% note [Member] | ||
Debt Instrument [Line Items] | ||
Total debt | $ 71,179 | $ 85,423 |
Debt instrument interest rate percentage | 3.86% | 3.86% |
Unsecured private placement 3.86% note [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Maturity Dates | 2020 | 2020 |
Unsecured private placement 3.86% note [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Maturity Dates | 2025 | 2025 |
Unsecured private placement 4.86% note [Member] | ||
Debt Instrument [Line Items] | ||
Total debt | $ 37,025 | $ 36,996 |
Debt instrument interest rate percentage | 4.86% | 4.86% |
Unsecured private placement 4.86% note [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Maturity Dates | 2020 | 2020 |
Unsecured private placement 4.86% note [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Maturity Dates | 2023 | 2023 |
Debt - Debt (Parenthetical) (De
Debt - Debt (Parenthetical) (Detail) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Unamortized debt issuance cost | $ 651,000 | $ 754,000 |
Unsecured private placement 3.95% note [Member] | ||
Debt Instrument [Line Items] | ||
Unamortized debt issuance cost | 284,000 | 316,000 |
Unsecured private placement 3.86% note [Member] | ||
Debt Instrument [Line Items] | ||
Unamortized debt issuance cost | 250,000 | 291,000 |
Unsecured private placement 4.86% note [Member] | ||
Debt Instrument [Line Items] | ||
Unamortized debt issuance cost | $ 117,000 | $ 147,000 |
Debt - Additional Information (
Debt - Additional Information (Detail) - Multi Currency Revolving Credit Agreement [Member] - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | ||
Revolving credit agreement | $ 350,000,000 | |
Credit agreement secured date | Jan. 30, 2023 | |
Letters of Credit Outstanding | $ 5,280,000 | |
Debt Outstanding | 0 | |
Unused Revolving credit | 344,720,000 | |
Unrestricted retained earnings | $ 351,219,000 | $ 283,956,000 |
Other, Net - Other Net in Conso
Other, Net - Other Net in Consolidated Statements of Income (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Other Nonoperating Income Expense [Abstract] | ||||
Foreign exchange gain | $ 476 | $ 374 | $ 1,467 | $ 333 |
Investment income | 119 | 106 | 287 | 309 |
Realized and unrealized gain (loss) on investments | 2,094 | (324) | 2,169 | 2,806 |
Net periodic pension benefit cost | (60) | 159 | (119) | 247 |
Gain on sale of asset | 570 | 570 | ||
Other, net | $ 2,629 | $ 885 | $ 3,804 | $ 4,265 |
Business Restructuring - Additi
Business Restructuring - Additional Information (Detail) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Mar. 31, 2019USD ($)Employees | Dec. 31, 2017USD ($) | Sep. 30, 2020USD ($)Employees | Sep. 30, 2019USD ($) | Dec. 31, 2018USD ($) | |
Restructuring Cost And Reserve [Line Items] | |||||||
Restructuring costs | $ 126,000 | $ 459,000 | $ 708,000 | $ 1,642,000 | |||
Netherlands [Member] | |||||||
Restructuring Cost And Reserve [Line Items] | |||||||
Number positions eliminated | Employees | 5 | ||||||
Severance costs | $ 396,000 | ||||||
Germany [Member] | Surfactants [Member] | |||||||
Restructuring Cost And Reserve [Line Items] | |||||||
Restructuring costs | $ 2,392,000 | ||||||
Germany [Member] | Surfactants [Member] | Asset and Spare Part [Member] | |||||||
Restructuring Cost And Reserve [Line Items] | |||||||
Restructuring costs | $ 1,404,000 | ||||||
Fieldsboro, NJ [Member] | |||||||
Restructuring Cost And Reserve [Line Items] | |||||||
Business restructuring | 251,000 | $ 915,000 | |||||
Longford Mills [Member] | Surfactants [Member] | |||||||
Restructuring Cost And Reserve [Line Items] | |||||||
Number positions eliminated | Employees | 30 | ||||||
Business restructuring | $ 8,113,000 | ||||||
Early Termination of Lease Expenses [Member] | Netherlands [Member] | |||||||
Restructuring Cost And Reserve [Line Items] | |||||||
Business restructuring | $ 79,000 | ||||||
Cumulative Decommissioning Costs [Member] | Germany [Member] | Surfactants [Member] | |||||||
Restructuring Cost And Reserve [Line Items] | |||||||
Restructuring costs | 988,000 | ||||||
Decommissioning Costs [Member] | Germany [Member] | Surfactants [Member] | |||||||
Restructuring Cost And Reserve [Line Items] | |||||||
Restructuring costs | 0 | 169,000 | 79,000 | 564,000 | |||
Decommissioning Costs [Member] | Longford Mills [Member] | Surfactants [Member] | |||||||
Restructuring Cost And Reserve [Line Items] | |||||||
Business restructuring | $ 126,000 | $ 290,000 | 629,000 | $ 811,000 | |||
Termination Benefits [Member] | Longford Mills [Member] | Surfactants [Member] | |||||||
Restructuring Cost And Reserve [Line Items] | |||||||
Business restructuring | 1,644,000 | ||||||
Other Expense [Member] | Longford Mills [Member] | Surfactants [Member] | |||||||
Restructuring Cost And Reserve [Line Items] | |||||||
Business restructuring | $ 6,469,000 |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Detail) - USD ($) | Sep. 30, 2020 | Sep. 17, 2020 | Mar. 13, 2020 | Dec. 17, 2019 | Sep. 30, 2020 | Dec. 31, 2019 |
Business Acquisition [Line Items] | ||||||
Paid from cash on hand | $ 13,519,000 | |||||
Paid from cash on hand, assets acquired | 2,040,000 | |||||
Goodwill | $ 27,152,000 | $ 27,152,000 | $ 26,086,000 | |||
Clariant (Mexico) S.A. de C.V. [Member] | Surfactants [Member] | 2020 Acquisitions [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Purchase price | $ 14,000,000 | |||||
Paid from cash on hand | 13,519,000 | |||||
Payment of VAT | $ 308,000 | |||||
Goodwill | 4,595,000 | |||||
Clariant (Mexico) S.A. de C.V. [Member] | Surfactants [Member] | 2020 Acquisitions [Member] | Trademarks and Know-how [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Intangible assets identified related to acquisition | $ 2,802,000 | |||||
Logos Technologies Asset Acquisition [Member] | Surfactants [Member] | 2020 Acquisitions [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Paid from cash on hand, assets acquired | $ 2,040,000 | |||||
Logos Technologies Asset Acquisition [Member] | Surfactants [Member] | 2020 Acquisitions [Member] | Trademarks and Know-how [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Intangible assets acquired | 1,392,000 | |||||
Logos Technologies Asset Acquisition [Member] | Surfactants [Member] | 2020 Acquisitions [Member] | Patents [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Intangible assets acquired | 464,000 | |||||
Logos Technologies Asset Acquisition [Member] | Surfactants [Member] | 2020 Acquisitions [Member] | Laboratory Equipment [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Equipment acquired | $ 184,000 | |||||
Oilfield Demulsifier Product Line [Member] | Surfactants [Member] | 2019 Acquisition [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Paid from cash on hand | $ 9,000,000 | |||||
Goodwill | $ 3,161,000 | |||||
Weighted average amortization periods of identifiable intangibles assets | 20 years | |||||
Oilfield Demulsifier Product Line [Member] | Surfactants [Member] | 2019 Acquisition [Member] | Product Know-how [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Intangible assets identified related to acquisition | $ 3,300,000 | |||||
Oilfield Demulsifier Product Line [Member] | Surfactants [Member] | 2019 Acquisition [Member] | Customer Relationships [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Intangible assets identified related to acquisition | $ 1,900,000 |
Acquisitions - Summary of Preli
Acquisitions - Summary of Preliminary Purchase Price Allocation for Acquisition (Detail) - USD ($) $ in Thousands | Sep. 30, 2020 | Sep. 17, 2020 | Dec. 31, 2019 |
Assets: | |||
Goodwill, net | $ 27,152 | $ 26,086 | |
2020 Acquisitions [Member] | Clariant (Mexico) S.A. de C.V. [Member] | Surfactants [Member] | |||
Assets: | |||
Goodwill, net | $ 4,595 | ||
Property, plant and equipment | 789 | ||
Total assets acquired | 14,000 | ||
2020 Acquisitions [Member] | Clariant (Mexico) S.A. de C.V. [Member] | Surfactants [Member] | Customer Lists [Member} | |||
Assets: | |||
Identifiable intangible assets | 4,814 | ||
2020 Acquisitions [Member] | Clariant (Mexico) S.A. de C.V. [Member] | Surfactants [Member] | Trademarks and Know-how [Member] | |||
Assets: | |||
Identifiable intangible assets | 2,802 | ||
2020 Acquisitions [Member] | Clariant (Mexico) S.A. de C.V. [Member] | Surfactants [Member] | Non-Compete Agreement [Member] | |||
Assets: | |||
Identifiable intangible assets | $ 1,000 |