Stepan Company (NYSE:SCL) Q1 2023 Results Earnings Conference Call April 25, 2023 8:00 AM ET
Company Participants
Luis Rojo - Vice President and Chief Financial Officer
Scott Behrens - President and Chief Executive Officer
Conference Call Participants
Mike Harrison - Seaport Global Securities
Vincent Anderson - Stifel Financial
David Silver - CL King & Associates
Operator
Welcome to the Q1 2023 Stepan Company Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions]. Please be advised that today's conference is being recorded.
I would now like to hand the conference over to Luis Rojo, Chief Financial Officer. Please go ahead.
Luis Rojo
Good morning and thank you for joining Stepan Company's first quarter 2023 financial review. Before we 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 our Securities and Exchange Commission filings.
Whether you're joining us online or over the phone, we encourage you to review the investor slide presentation, which we have made available at www.stepan.com under the Investors section of our website. We made these slides available at approximately the same time as when the earnings release is issued. And we hope that you find the information and perspective helpful.
With that, I would like to turn the call over to Mr. Scott Behrens, our President and Chief Executive Officer.
Scott Behrens
Good morning and thank you all for joining us today to discuss our first quarter results. To begin, I will share our first quarter highlights and strategic outlook, while Luis will provide additional details on our financial results.
The company reported first quarter adjusted net income of $16.4 million. Earnings was significantly impacted by a 14% decline in volume, driven by softening market demand, delays in the startup of new low 1,4 dioxane production assets, and continued customer and channel destocking across most of our markets.
Our margins were in line with expectations despite high cost inventory carryover from the fourth quarter and increased competitive activity within certain end use markets. Despite ongoing inflationary pressures and higher cash expenses related to the construction and pre-commissioning activities of our new alkoxylation investment in Pasadena, Texas, and the startup of our new low 1,4 dioxane capacity in the US, we kept cash expenses consistent year-over-year.