<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(MARK ONE)
( X ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1995
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ____________ TO _______.
1-4462
---------------------
Commission File Number
STEPAN COMPANY
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 36 1823834
- ---------------------------------- -------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
Edens and Winnetka Road Northfield, Illinois 60093
- -------------------------------------------------------------------------------
(Address of principal executive offices)
Registrant's telephone number (708) 446-7500
-----------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at April 30, 1995
- --------------------------- -----------------------------
Common Stock, $1 par value 9,969,000 Shares
<PAGE> 2
Part I FINANCIAL INFORMATION
Item 1 - Financial Statements
STEPAN COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, 1995 and December 31, 1994
Unaudited
<TABLE>
<CAPTION>
(Dollars in Thousands) 3/31/95 12/31/94
------- --------
ASSETS
- ------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 2,119 $ 2,452
Receivables, net 78,496 70,385
Inventories (Note 3) 41,799 45,464
Other current assets 10,990 11,070
-------- --------
Total current assets 133,404 129,371
-------- --------
PROPERTY, PLANT AND EQUIPMENT:
Cost 425,972 417,654
Less accumulated depreciation 241,711 233,997
-------- --------
184,261 183,657
-------- --------
OTHER ASSETS 15,807 11,920
-------- --------
Total assets $333,472 $324,948
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt $ 7,965 $ 8,043
Accounts payable 32,067 37,904
Accrued liabilities 31,916 34,509
-------- --------
Total current liabilities 71,948 80,456
-------- --------
DEFERRED INCOME TAXES 33,291 32,976
-------- --------
LONG-TERM DEBT, less current maturities (Note 4) 101,302 89,795
-------- --------
DEFERRED REVENUE (Note 7) 9,827 10,419
-------- --------
STOCKHOLDERS' EQUITY:
5-1/2% convertible preferred stock, cumulative, voting without par value; 19,980 19,980
authorized 2,000,000 shares; issued 799,196 shares in 1995 and in 1994
Common stock, $1 par value; authorized 15,000,000 shares; 10,031 10,029
issued 10,031,344 shares in 1995 and 10,028,544 shares in 1994
Additional paid-in capital 4,044 3,983
Cumulative translation adjustments (3,045) (3,491)
Retained earnings (approximately $39,712 unrestricted in 1995 and $36,336 in 1994) 87,458 82,445
-------- --------
118,468 112,946
Less - Treasury stock, at cost (Note 6) 1,364 1,644
-------- --------
Stockholders' equity 117,104 111,302
-------- --------
Total liabilities and stockholders' equity $333,472 $324,948
======== ========
</TABLE>
The accompanying Notes to Condensed Consolidated Financial Statements are an
integral part of these condensed consolidated balance sheets.
<PAGE> 3
STEPAN COMPANY
CONSOLIDATED STATEMENTS OF INCOME
For the Three Months Ended March 31, 1995 and 1994
Unaudited
<TABLE>
<CAPTION>
(In Thousands, except per share amounts) Three Months
Ended March 31
---------------------
1995 1994
---- ----
<S> <C> <C>
NET SALES $134,786 $107,279
-------- --------
COSTS AND EXPENSES:
Cost of Sales 108,131 88,136
General and Administrative 5,804 4,937
Marketing 4,552 4,221
Research, Development and Technical Services 4,499 4,640
Interest, net (Note 4) 1,864 1,918
-------- --------
124,850 103,852
-------- --------
PRE-TAX INCOME 9,936 3,427
PROVISION FOR INCOME TAXES 3,827 1,405
-------- --------
NET INCOME $6,109 $2,022
======== ========
NET INCOME PER COMMON SHARE (Note 5)
Primary $0.59 $0.18
======== ========
Fully Diluted $0.55 $0.17
======== ========
DIVIDENDS PER COMMON SHARE $0.110 $0.105
======== ========
AVERAGE COMMON SHARES OUTSTANDING 9,953 9,898
======== ========
</TABLE>
All 1994 share and per share data have been retroactively adjusted
for the stock split effective December 15, 1994.
The accompanying Notes to Condensed Consolidated Financial Statements
are an integral part of these statements.
<PAGE> 4
STEPAN COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 1995 and 1994
Unaudited
<TABLE>
<CAPTION>
(Dollars in Thousands) 3/31/95 3/31/94
-------- -------
<S> <C> <C>
NET CASH FLOW FROM OPERATING ACTIVITIES
Net income $ 6,109 $ 2,022
Depreciation and amortization 7,722 7,566
Deferred income taxes 289 206
Prepaid pension cost (184) (86)
Other non-cash items (26) 170
Deferred revenue (Note 7) (592) 2,793
Changes in Working Capital:
Receivables, net (8,111) (7,137)
Inventories 3,665 5,943
Accounts payable and accrued liabilities (8,093) (6,105)
Other 80 280
-------- -------
Net Cash Provided by Operating Activities 859 5,652
-------- -------
CASH FLOWS FROM INVESTING ACTIVITIES
Expenditures for property, plant and equipment (7,673) (8,192)
Investment in joint venture (3,750) --
Other non-current assets (15) (244)
-------- -------
Net Cash Used for Investing Activities (11,438) (8,436)
-------- -------
CASH FLOWS FROM FINANCING AND OTHER RELATED ACTIVITIES
Revolving debt and notes payable to banks, net 11,353 5,102
Other debt borrowings 70 --
Other debt repayments -- (9)
Sales of treasury stock, net of purchases 280 111
Dividends paid (1,364) (1,312)
Other non-cash items (93) 114
-------- -------
Net Cash Provided by Financing and Other Related Activities 10,246 4,006
-------- -------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (333) 1,222
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR $ 2,452 $ 1,515
-------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 2,119 $ 2,737
======== =======
CASH PAID DURING THE PERIOD FOR:
Interest $ 1,445 $ 1,247
Income taxes $ 3,238 $ 579
</TABLE>
The accompanying Notes to Condensed Consolidated Financial Statements are an
integral part of these statements.
<PAGE> 5
STEPAN COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1995 and December 31, 1994
Unaudited
1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The condensed consolidated financial statements included herein have
been prepared by the company, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles 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. It is
suggested that these condensed consolidated financial statements be
read in conjunction with the financial statements and the notes
thereto included in the company's latest Annual Report to Stockholders
and the Annual Report to the Securities and Exchange Commission on
Form 10-K for the year ended December 31, 1994. In the opinion of
management all adjustments, consisting only of normal recurring
adjustments, necessary to present fairly the consolidated financial
position of Stepan Company as of March 31, 1995, and the consolidated
results of operations for the three months then ended, and cash flows
for the three months then ended, have been included.
Because the inventory determination under the LIFO method can only be
made at the end of each year based on the inventory levels and costs
at that point, interim LIFO determinations must necessarily be based
upon management's estimates of expected year-end inventory levels and
costs. Since future estimates of inventory levels and prices are
subject to many forces beyond the control of management, interim
financial results are subject to final year-end LIFO inventory
amounts.
2. ENVIRONMENTAL EXPENDITURES
Environmental expenditures that relate to current operations are
expensed or capitalized as appropriate. Expenditures that relate to
an existing condition caused by past operations, and which do not
contribute to current or future revenue generation, are expensed.
Liabilities are recorded when environmental assessments and/or
remedial efforts are probable and the cost or range of possible costs
can be reasonably estimated. When no amount within the range is a
better estimate than any other amount, at least the minimum is
accrued. Some of the factors on which the company bases its estimates
include information provided by feasibility studies, potentially
responsible party negotiations and the development of remedial action
plans. Liabilities are recorded at gross amounts of probable future
cash outlays and are not discounted to reflect the time value of
money. While the company has insurance policies that may cover some
of its liabilities, it does not record those claims until such time as
they become probable. Expenditures that mitigate or prevent
environmental contamination that has yet to occur
<PAGE> 6
and that otherwise may result from future operations are capitalized.
Capitalized expenditures are depreciated generally utilizing a 10-year
life.
3. INVENTORIES
Inventories include the following amounts:
<TABLE>
<CAPTION>
(Dollars in Thousands) 3/31/95 12/31/94
------- --------
<S> <C> <C>
Inventories valued primarily on LIFO basis -
Finished products $24,330 $27,632
Raw materials 17,469 $17,832
------- -------
Total inventories $41,799 $45,464
======= =======
</TABLE>
If the first-in, first-out (FIFO) inventory valuation method had been
used for all inventories, inventory balances would have been
approximately $14,000,000 and $13,200,000 higher than reported at
March 31, 1995, and December 31, 1994, respectively.
4. DEBT
Long-term debt includes unsecured bank debt of $33.1 million and $21.8
million at March 31, 1995, and December 31, 1994, respectively. The
unsecured bank debt is available to the company under a line of credit
based on rates that fluctuate daily. The average interest rate on
unsecured bank debt for the three month period ended March 31 was 6.67
percent and 4.08 percent for 1995 and 1994, respectively.
5. NET INCOME PER COMMON SHARE
Primary net income per common share amounts are computed by dividing
net income less the convertible preferred stock dividend requirement
by the weighted average number of common shares outstanding. Fully
diluted net income per share amounts are based on an increased number
of common shares that would be outstanding assuming the exercise of
certain outstanding stock options and the conversion of the
convertible preferred stock, when such conversion would have the
effect of reducing net income per share. For computation of earnings
per share, reference should be made to Exhibit 11.
6. TREASURY STOCK
At March 31, 1995, treasury stock consists of 20,208 shares of
preferred stock and 64,852 shares of common stock. At December 31,
1994, treasury stock consisted of 20,208 shares of preferred stock and
84,280 shares of common stock.
<PAGE> 7
7. DEFERRED REVENUE
During 1994, the company received $12.9 million of prepayments on
certain multi-year commitments for future shipments of products. As
the commitments are fulfilled, a proportionate share of the deferred
revenue is taken into income. During the first quarter of 1995, $.6
million of deferred revenue was recognized as income. Related
deferred revenue at March 31, 1995, is $12.2 million of which $2.4
million is included in the "Accrued liabilities" caption of the
Condensed Consolidated Balance Sheets.
8. CONTINGENCIES
There are a variety of legal proceedings pending or threatened against
the company. Some of these proceedings may result in fines,
penalties, judgments or costs being assessed against the company at
some future time. The company's operations are subject to extensive
local, state and federal regulations, including the federal
Comprehensive Environmental Response, Compensation and Liability Act
of 1980 ("Superfund") and the Superfund amendments of 1986. The
company, and others, have been named as potentially responsible
parties at affected geographic sites. As discussed in Management's
Discussion and Analysis of Financial Condition and Results of
Operations included in this filing, the company believes that it has
made adequate provisions for the costs it may incur with respect to
these sites. The company has estimated a range of possible
environmental and legal losses from $5.7 million to $21.8 million at
March 31, 1995. At March 31, 1995, the company's reserve was $6.6
million for legal and environmental matters compared to $6.9 million
at December 31, 1994. While the company has insurance policies that
may cover some of its environmental costs, it does not record those
claims until such time as they become probable. At March 31, 1995,
the company has not recorded any of such insurance claims.
At certain of the sites, estimates cannot be made of the total costs
of compliance, or the company's share of such costs; accordingly, the
company is unable to predict the effect thereof on future results of
operations. In the event of one or more adverse determinations in any
annual or interim period, the impact on results of operations for
those periods could be material. However, based upon the company's
present belief as to its relative involvement at these sites, other
viable entities' responsibilities for cleanup and the extended period
over which any costs would be incurred, the company believes that
these matters will not have a material effect on the company's
financial position. Certain of these matters are discussed in Item 3,
Legal Proceedings, in the 1994 Form 10-K Annual Report and in other
filings of the company with the Securities and Exchange Commission,
which filings are available upon request from the company.
9. RECLASSIFICATIONS
Certain amounts in the 1994 financial statements have been
reclassified to conform with the 1995 presentation.
<PAGE> 8
STEPAN COMPANY
Management's Discussion and Analysis of
Financial Condition and Results of Operations
The following is management's discussion and analysis of certain significant
factors which have affected the company's financial condition and results of
operations during the interim period included in the accompanying condensed
consolidated financial statements.
LIQUIDITY AND CAPITAL RESOURCES
For the first three months of 1995, cash from operations totaled $.9 million,
compared to $5.7 million for the same period last year. Net income, adjusted
for non-cash items, totaled $13.3 million, compared to $12.7 million recorded
in 1994. Included in cash flow from operations for 1994 was $2.5 million in
customer prepayments for future delivery of product. During the first quarter
of 1995, working capital items constituted a $12.5 million use of cash,
compared to a use of $7.0 million during the same quarter of 1994. The
decline in inventory for the first quarter was smaller than a year ago. Other
working capital items all required a greater use of cash than the previous year
as a result of the increase in sales.
Capital expenditures totaled $7.7 million for the first quarter of 1995,
compared to $8.2 million for the same period of 1994. It is expected that
total expenditures for 1995 will approximate $48.5 million, compared to $42.9
million in 1994.
Since December 31, 1994, total company debt has increased by $11.4 million.
Since year end, the ratio of long-term debt to long-term debt plus
shareholders' equity has increased from 44.7 percent to 46.4 percent. The
increase was due to increased working capital requirements as well as funding
the remaining $3.8 million capital contribution to the Philippine joint venture
entered into in 1994. The company anticipates that further increases in debt
during the year from existing credit facilities are likely in order to fund
planned capital expenditures and possible additional global opportunities.
The company maintains contractual relationships with its domestic banks which
provide for $45 million of revolving credit which may be drawn upon as needed
for general corporate purposes. The company also meets short-term liquidity
requirements through uncommitted bank lines of credit and bankers' acceptances.
The company's foreign subsidiaries maintain committed and uncommitted bank
lines of credit in their respective countries to meet working capital
requirements as well as to fund capital expenditure programs.
The company anticipates that cash from operations and from committed credit
facilities will be sufficient to meet anticipated capital expenditure programs,
dividend requirements and other planned financial commitments in 1995 and for
the foreseeable future.
<PAGE> 9
RESULTS OF OPERATIONS
Net income for the first quarter of 1995 rose 202 percent to $6.1 million, or
$.59 per share, up from $2.0 million, or $.18 per share, recorded in the same
quarter of 1994. Net sales increased 26 percent to $134.8 million, up from
$107.3 million reported a year ago.
Sales data for the 1995 first quarter compared with the same quarter of the
prior year is set forth in the following table:
<TABLE>
<CAPTION>
Three Months
Ended March 31
--------------------------------------
(Dollars in Millions)
Net Sales: 1995 1994 % Change
---- ---- ------
<S> <C> <C> <C>
Surfactants $ 98.7 $ 83.1 + 19
Polymers 27.4 16.4 + 67
Specialty Products 8.7 7.8 + 12
------ ------
Total $134.8 $107.3 + 26
====== ======
</TABLE>
Surfactants increase in net sales was due in large part to a 10 percent
increase in sales volume. Higher average selling prices resulting from raw
material cost increases also contributed to higher net sales. A large part of
the volume gain was from large national customers where volume was weak in the
prior year quarter. Capacity expansions at two domestic plants, to meet demand
for new neutralized products, have been completed. The company has a
multi-year commitment for a significant portion of this capacity with 1995
representing a scale up year. First quarter shipments under this commitment
contributed to the increase in sales volume. Strong domestic sales volume was
also supported by volume increases in Europe, Canada and Mexico. Reported
sales in Mexico were down despite higher volume due to the negative impact of
the devalued peso.
Surfactants gross profit increased 25 percent from $16.1 million to $20.2
million for the first quarter of 1995. Gross profit rose sharply on higher
sales volume and favorable mix of higher margin products. Europe's gross
profit was up on higher sales volume and also benefited from a stronger French
franc. Canadian and Mexican gross profit was relatively unchanged from a year
ago.
Polymers net sales were up due to higher sales volumes of phthalic anhydride
(PA) and polyurethane polyols. PA net sales also rose from higher selling
prices triggered by significant raw material price increases. Demand for PA is
expected to remain strong for the balance of the year. Sales of polyurethane
systems declined on lower sales volume.
Polymers gross profit for the quarter rose 126 percent to $5.2 million from
$2.3 million in the prior year. Higher PA sales volume and margins generated
most of the increase. Polyurethane
<PAGE> 10
polyols gross profit also improved on higher sales volume and margins.
Polyurethane systems gross profit declined on lower sales volume.
Specialty products net sales were up despite lower sales volume due to improved
sales mix of higher value products. Sales of some lower margin products were
discontinued in the current year. Gross profit for specialty products rose by
$.6 million to $1.3 million for the current quarter as a result of favorable
sales mix of higher margin products.
Operating expenses for the first quarter increased 8 percent over the same
quarter in 1994. Administrative expenses increased 18 percent representing a
majority of the operating expense increase as a result of higher legal and
environmental expenses. Marketing expenses rose 8 percent primarily due to
higher salaries. Research and development expenses declined 3 percent on lower
nonrecurring project costs and lower repair and maintenance charges.
Interest expense for the quarter declined 3 percent from the same quarter in
1994.
ENVIRONMENTAL AND LEGAL MATTERS
The company is subject to extensive federal, state and local environmental laws
and regulations. Although the company's environmental policies and practices
are designed to ensure compliance with these laws and regulations, future
developments and increasingly stringent environmental regulation could require
the company to make additional unforeseen environmental expenditures. The
company will continue to invest in the equipment and facilities necessary to
comply with existing and future regulations. During the first quarter of 1995,
company expenditures for capital projects related to the environment were $.5
million and should approximate $8 million to $10 million for the full year
1995. These projects are capitalized and typically depreciated over 10 years.
Capital spending on such projects is likely to be somewhat lower in future
years as 1995 includes some larger projects. Recurring costs associated with
the operation and maintenance of environmental protection facilities in ongoing
operations were $1.8 million for the first three months of 1995. While
difficult to project, it is not anticipated that these recurring expenses will
increase significantly in the future.
The company has been named by the government as a potentially responsible party
at 15 waste disposal sites where cleanup costs have been or may be incurred
under the federal Comprehensive Environmental Response, Compensation and
Liability Act and similar state statutes. In addition, damages are being
claimed against the company in general liability actions for alleged personal
injury or property damage in the case of some disposal and plant sites. The
company believes that it has made adequate provisions for the costs it may
incur with respect to these sites. The company has estimated a range of
possible environmental and legal losses from $5.7 million to $21.8 million at
March 31, 1995. At March 31, 1995, the company's reserve was $6.6 million for
legal and environmental matters compared to $6.9 million at December 31, 1994.
During the first three months of 1995, expenditures related to legal and
environmental matters approximated $1.7 million. Expenditures for the
remainder of the year are expected to be lower. The company is continuing to
receive reimbursement of environmental defense costs from insurers. At certain
of
<PAGE> 11
the sites, estimates cannot be made of the total costs of compliance or the
company's share of such costs; accordingly, the company is unable to predict
the effect thereof on future results of operations. In the event of one or
more adverse determinations in any annual or interim period, the impact on
results of operations for those periods could be material. However, based upon
the company's present belief as to its relative involvement at these sites,
other viable entities' responsibilities for cleanup and the extended period
over which any costs would be incurred, the company believes that these matters
will not have a material effect on the company's financial position. Certain
of these matters are discussed in Item 3, Legal Proceedings, in the 1994 Form
10-K Annual Report and in other filings of the company with the Securities and
Exchange Commission, which filings are available upon request from the company.
<PAGE> 12
Part II OTHER INFORMATION
Item 1 - Legal Proceedings
Reference is made to the company's Annual Report Form 10-K for the year ended
December 31, 1994, concerning the company's Maywood, New Jersey property and
property adjacent thereto ("sites") and the USEPA's demand for one million
seventy-six thousand dollars ($1,076,000) in past costs. Following a meeting
with the EPA, the company paid four hundred seventy-eight thousand four hundred
thirty-one dollars and 54 cents ($478,431.54) for past costs attributable to
the sites. The company will seek reimbursement for these costs from the other
potentially responsible parties ("PRPs") at the sites. As to the balance of
the past costs, as these costs relate to the Stepan Company property for which
a Subsection 106 Administrative Order is in place, it is the company's position
that under current Third Circuit decisional law, most notably United States v.
Rohm and Haas Co., 37 ERC 1193 (3rd Cir. 1993), the USEPA is precluded from
collecting these amounts. As of this date, no further demand has been made.
Reference is made to the company's Report Form 10-Q for the quarter ended
September 30, 1994, relating to the action entitled "General Electric Company
vs. Buzby Brothers Material Corp. (CA 87-4263 JHR). The company has settled
this claim for an amount which is not material. The settlement must be
approved by the Court, but the company does not anticipate any problem in this
regard.
Reference is made to the company's Report Form 10-K for the year ended December
31, 1993, regarding the Chemical Control Site. On March 10, 1995, the State of
New Jersey sent to the company, along with about 200 other PRPs, a demand for
thirty-four million dollars ($34,000,000) in past costs regarding the Chemical
Control Site in Elizabeth, New Jersey. The company has maintained throughout
these proceedings that it is not a PRP at this site. This position is based on
the fact that the only documentation linking the company to this site is a
manifest which clearly demonstrates that the company's shipment was rejected.
The company has notified the State of New Jersey of this fact. The company is
currently investigating this demand and cannot make a determination as to what
liability, if any, it may have.
On March 17, 1995, the company was served in an action in Atlantic County, New
Jersey entitled John J. D'Andrea v. Jerome Lightman et. al (No.
ATL-L-000810-95). The company denies the allegations set forth in this action,
and also believes it has adequate defenses. Consequently, the company cannot
determine what its liability, if any, will be.
On December 8, 1993, the company was served in an action brought in the United
States District Court in Delaware entitled Alcon Laboratories, Inc. v.
Millmaster Onyx Group, Inc. v. Stepan Company (C.A. No. 93-510-SLR). This case
alleges patent infringement, breach of contract and tortious acts as well as
various counterclaims. Alcon and Millmaster Onyx reached a settlement and
consequently, this case is now entitled Millmaster Onyx Group, Inc. v. Stepan
Company (C.A. No. 93-510-LON). The case is scheduled for trial commencing in
June 1996. The company cannot now, however, estimate what its liability, if
any, will be with regard to this case.
<PAGE> 13
Item 4 - Submission of Matters to a Vote of Security Holders
(A) The company's 1994 Annual Meeting of Stockholders was held on
May 1, 1995.
(B) Proxies were solicited by management pursuant to Regulation 14
under the Securities Exchange Act of 1934, there was no
solicitation in opposition to management's nominees as listed
in the proxy statement, and all such nominees were elected.
(C) A majority of the outstanding shares voted to ratify the
appointment of Arthur Andersen LLP as independent auditors for
the company for 1995.
9,651,972 For
27,570 Against
13,219 Abstentions
Item 6 - Exhibits and Reports on Form 8-K
(A) Exhibits
(11) Statement re Computation of Per Share Earnings
(27) Financial Data Schedule
(B) Reports on Form 8-K
A report on Form 8-K was filed on April 12, 1995, regarding
record quarterly earnings.
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
STEPAN COMPANY
/s/ Walter J. Klein
Walter J. Klein
Vice President - Finance
Principal Financial and
Accounting Officer
Date: 5/12/95
<PAGE> 1
Exhibit (11)
STEPAN COMPANY
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
For the Three Months Ended March 31, 1995 and 1994
Unaudited
<TABLE>
<CAPTION>
(In Thousands, except per share amounts) Three Months
Ended March 31
-------------------------
1995 1994
---- ----
<S> <C> <C>
Computation of Per Share Earnings
Net income $6,109 $2,022
Deduct dividends on preferred stock 268 271
------ ------
Income applicable to common stock $5,841 $1,751
====== ======
Weighted average number of shares outstanding 9,953 9,898
Per share earnings* $0.587 $0.177
====== ======
Computation of Per Share Primary Earnings
Income applicable to common stock $5,841 $1,751
====== ======
Weighted average number of shares outstanding 9,953 9,898
Add net shares issuable from assumed exercise
of options (under treasury stock method) 176 156
------ ------
Shares applicable to primary earnings 10,129 10,054
====== ======
Per share primary earnings* $0.577 $0.174
====== ======
Dilutive effect 1.7% 1.7%
Computation of Per Share Fully Diluted Earnings
Net income (See Note A) $6,109 $1,751
====== ======
Weighted average number of shares outstanding 9,953 9,898
Add net shares issuable from assumed exercise
of options (under treasury stock method) 176 156
Add weighted average shares issuable from
assumed conversion of convertible preferred
stock (See Note A) 889 --
------ ------
Shares applicable to fully diluted earnings 11,018 10,054
====== ======
Per share fully diluted earnings* $0.554 $0.174
====== ======
Dilutive effect 5.6% 1.7%
</TABLE>
(A) For 1994, the assumed conversion of convertible preferred stock would
have been antidilutive. Accordingly, the dividends and shares
issuable from assumed conversion have been excluded pursuant to APB
No. 15.
- ---------------
* Rounded
This calculation is submitted in accordance with Regulation S-K,
item 601(b)(11).
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONDENSED
CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 1995 AND CONSOLIDATED STATEMENT OF
INCOME FOR THE THREE MONTHS THEN ENDED AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
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0
19,980
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</TABLE>
