Earnings Call Excerpt
Stepan Co. (SCL)
Q4 2008 Earnings Call
February 11, 2009 2:00 pm ET
Executives
James E. Hurlbutt – Chief Financial Officer
Analysts
George Gasper – Robert Baird
[John Beier – SKA Financial]
Presentation
Operator
Welcome to Stepan Company’s fourth quarter 2008 conference call. (Operator Instructions) I would now like to turn the conference over to Jim Hurlbutt, Vice President and Chief Financial Officer. Please go ahead sir.
James Hurlbutt
Good afternoon and thank you for joining us. Before I begin, please note that information in this conference call contains forward-looking statements, which are not historical facts. These statements involve risks and uncertainties that could cause actual results to differ materially including but not limited to prospects for our foreign operations, global and regional economic conditions, and factors detailed in the company's Securities and Exchange Commission filings.
We are pleased to report record earnings for 2008 that represent the culmination of focus on our core business growth and diversification opportunities combined with a disciplined approach to our cost structure. We are also proud to have delivered to our shareholders in 2009 our 41st consecutive year of increased common stock dividend pay outs despite theses challenging economic times.
At this point, let me walk through our fourth quarter and full year 2008 results. Starting with the top line total net sales for the full year 2008 were $1.6 billion up 20% year-over-year benefiting primarily from higher selling prices, which accounted for 21 percentage points of net sales growth and the positive effect of foreign exchange currency translation, which accounted for one percentage point of the net sales growth.
Both factors were partially off set by a 2% decline in year-over-year sales volume. Total net sales for the fourth quarter were $365 million up 7% year over year. Quarterly sales also benefited primarily from higher selling prices as sales volume declined 7%.
Net income for the full year 2008 increased to a record $37.2 million or $3.52 per diluted share compared to net income of $15.1 million or $1.50 per diluted share in the year ago period. Net income for the fourth quarter was $1.7 million or $0.15 per share compared to net income of $1.6 million or $0.15 per diluted share in the year ago quarter.
Full year 2008, gross profit increased by $28.1 million or 20% year-over-year on improved surfactants segment profitability. Fourth quarter 2008 gross profit declined by $2.7 million or 8% as volume declined 7% and higher priced raw material inventory was consumed.
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