SCL

Image source: The Motley Fool. Wednesday, July 29, 2026 at 9:00 a.m. ET Vice President and Chief Financial Officer - Ruben Velasquez President and Chief Executive Officer - Luis Rojo Need a quote from a Motley Fool analyst? Email [email protected] Operator: Thank you. Good morning, and welcome to the Stepan Company Second Quarter 2026 Earnings Conference Call. [Operator Instructions] As a reminder, this call is being recorded on Wednesday, July 29, 2026. It's now my pleasure to turn the call over to Mr. Ruben Velasquez, Vice President and Chief Financial Officer of Stepan Company. Mr. Velasquez, please go ahead. Ruben Velasquez: Thanks, Marvin. Good morning, and thank you for joining Stepan Company's second quarter 2026 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 of the global economy detailed in our Securities and Exchange Commission filings. In addition, this conference call will include discussions of adjusted net income, adjusted EBITDA, free cash flow, net debt, and leverage-related metrics, which are non-GAAP measures. We provide reconciliations to the compatible GAAP measures in the earnings presentation and press release, which we have made available at www.stepan.com under the Investors section of our website. Whether you are joining us online or over the phone, we encourage you to review the investment slide presentation. We make these slides available at approximately the same time as when the earnings release is issued, and we hope that you find the information and perspectives helpful. With that, I would like to turn the call over to Mr. Luis Rojo, our President and Chief Executive Officer. Luis Rojo: Thank you, Ruben. Good morning, and thank you all for joining us today to discuss our second quarter 2026 results. I will share the highlights of the quarter and an update on our key strategic priorities, and Ruben will take you through the financial details. Before reviewing the quarter, I want to recognize our teams around the world for their commitment to safety. Safety remains our top priority and the foundation on everything we do at Stepan. That focus was evident again this quarter, as we now have delivered the strongest safety performance on record in the last 12 months. Congratulations, team. The second quarter was a strong quarter of execution for Stepan. Broad-based volume growth and margin recovery, together with the initial benefits from Project Catalyst actions, drove significant improvement in earnings. I want to highlight a few elements of our second quarter performance. Adjusted EBITDA was $74 million, up 45% versus the prior year, with all three levers contributing to the results. First, volume growth. Organic volume grew 6% with growth across all our end markets. We're growing share in many of our strategic end markets. Second, margin recovery. The pricing actions we are implementing, together with the discipline and execution of our contractual pass-through mechanisms, contributed to margin recovery during the quarter and helped offset higher raw material costs. Third, productivity and cost out. Project Catalyst remains on track, with savings ramping up in line with our plan. We are on track to deliver our savings commitments for the year. Looking at the consolidated results, net sales were $684 million, up 15% versus the prior year, driven by higher selling prices, higher volume, favorable product and customer mix, and favorable currency translation. Adjusted earnings per diluted share were $1.18, more than double the prior year. Finally, we remain focused on cash generation and balance sheet deleveraging. We finished Q2 with a net leverage ratio of 2.5 times. We continue to advance the previously announced agreement to sell a parcel of non-productive land adjacent to our plant in Joliet, Illinois, subject to customary closing conditions. We were pleased with the breadth of the growth during the quarter. We also believe a portion of the incremental demand we experienced in the quarter reflects some customer pre-buying in response to the geopolitical and raw material uncertainty. We are considering that potential timing effect as we plan for the second half of 2026. We remain committed to a balanced approach to capital allocation. During the quarter, we invested significantly in working capital, due to the escalation of raw material costs and higher sales. We executed flawlessly our capex plan across our site. And finally, the company paid $9 million in dividends. Last year, we increased our dividend for the 58th consecutive year. With that, I will turn the call back to Ruben to walk you through the financial details for the quarter. Ruben Velasquez: Thank you, Luis. As shared in our second quarter 2026 earnings release, reported net income was $22.9 million or $1.00 per diluted share, up 102% versus $11.3 million or $0.50 per diluted share in the prior year. Reported results include a $5.1 million pre-tax restructuring charge or $4.0 million after-tax, largely related to the previously announced closure of our Fieldsboro, New Jersey site and the decommissioning of select assets at our Millsdale, Illinois and Stalybridge, United Kingdom facilities. The cash impact associated with restructuring was approximately $6 million during the quarter. The plan to reduce our global salaried workforce, as announced today, is part of the previously announced Project Catalyst efficiency initiative. The majority of the expenses associated with these workforce actions is expected to be recognized during the second half of 2026. The company anticipates full-year restructuring charges in the range of $75 million to $80 million, which is in line with prior communications. Let's now move to slide 5, which shows the adjusted net income bridge for the second quarter of 2026 versus the second quarter of last year. Adjusted net income was $27.1 million or $1.18 per diluted share, up 126% versus $12 million or $0.52 per diluted share in the prior year. The increase in adjusted net income was primarily due to increased earnings in surfactants and in polymers, partially offset by higher corporate expenses and a higher tax provision on stronger earnings. Adjusted corporate expenses increased $2.7 million, or 17%, driven by normal inflation and higher incentive-based compensation associated with improved operating performance. Moving now to slide 6, which shows the total company adjusted EBITDA bridge. Adjusted EBITDA was $74.4 million, up $23 million, or 45% versus the prior year. This increase was primarily due to higher surfactant volume earnings driven by sales volume growth, margin recovery, and Catalyst savings, partially offset by the higher corporate expenses. I will now cover each segment in more detail. Turning to surfactants on slide 7, net sales were $484 million, up 18% versus the prior year. Selling prices were up 12%, primarily due to the pass-through of higher raw material costs, improved product and customer mix, and the pricing actions implemented. Reported volume grew 3%, and organic volume increased 7%. Foreign currency translation positively impacted net sales by 4%. The organic growth was broad-based with all end markets and regions delivering organic volume growth led by industrial cleaning, laundry, construction and industrial, and oil field. Our strategic end markets combined grew high single digits. Surfactant adjusted EBITDA was $55 million, up $20 million or 59% versus the prior year. North America and Asia earnings improved on broad-based volume growth, Catalyst savings, and the recovery of the production timing and absorption impacts that we discussed on our first quarter call. Latin America earnings increased on double-digit organic volume growth, pricing execution, and margin recovery. Europe was up modestly on organic growth anchored in laundry, household and institutional cleaning, and construction and industrial applications. Moving to polymers on slide 8, net sales were $178 million, a 9% increase versus the prior year. Selling prices were up 3%, primarily due to pricing actions and the pass-through of higher raw material costs. Sales volume increased 5% in the quarter. North American volume was up strong double digits, driven by rigid polyols and PA, including significant growth in our spray foam product line. This was partially offset by lower volumes in Europe and Asia. Foreign currency translation positively impacted net sales by 1%. Polymer adjusted EBITDA was $31 million, up 22% versus the prior year, primarily due to sales volume growth and margin recovery. North America EBITDA was up $5 million on strong volume growth and margin recovery. Europe improved modestly as margin recovery helped offset construction demand that remained soft. Asia was slightly lower on softer demand in China. Specialty product net sales were $22 million, an 8% increase versus the prior year, and volume increased 4%. Adjusted EBITDA of $6.5 million was slightly down, primarily due to less favorable product mix within the medium chain triglycerides product line. Now turning to cash flow and the balance sheet on slide 9. Cash flow from operations before working capital was $56 million in the second quarter, including a $6 million cash impact associated with restructuring activities. Excluding restructuring cash impacts and working capital investments, cash flow from operations increased significantly. Free cash flow was a negative $15 million after capital expenditures of $23 million. The cash flow reflected a $58 million working capital build associated with stronger sales and higher raw material costs. We ended the quarter with net debt of $534 million and a net leverage ratio of 2.5 times, versus the 2.7 times we reported in the first quarter and 2.9 times in the second quarter of last year. Improving cash generation and deleveraging the balance sheet remains a key focus across the organization in the second half. With that, I will turn the call back to Luis for an update on our strategic priorities and Project Catalyst. Luis Rojo: Thanks, Ruben. Our strategy continues to be anchored in four pillars. First, customer-centric innovation to drive top-line growth. Second, diversification of our markets and customers, accelerating growth in higher value end markets while extending our reach into Tier 2 and Tier 3 customers. Third, operational excellence, with a continued emphasis on the reliability and resiliency of our manufacturing network and supply chain, including ongoing improvements at our flagship Millsdale site. And four, financial strength through a disciplined focus on free cash flow generation, deleveraging the balance sheet, and prudent capital allocation. We continued to make progress against these priorities during the quarter. Surfactant growth was broad-based across our strategic end markets and our Tier 2 and Tier 3 customer base. North America Polymers delivered double-digit growth in rigid polyols and PA, supported by significant growth in our spray foam initiative. We delivered this growth while recovering margin in an inflationary raw material environment which reflects disciplined commercial execution. Finally, we continue to improve the reliability and resiliency of our manufacturing network. Our flagship Millsdale site had a great quarter in terms of production volumes and improving all key operating metrics. Our Pasadena, Texas site continues to ramp up production and deliver the expected supply chain savings embedded in Project Catalyst. Pasadena remains a critical enabler for strategic future growth in specialty alkoxylates. Let's move to slide 11 for an update on Project Catalyst. As a reminder, Project Catalyst is our comprehensive plan designed to further optimize our asset base and create a more productive and agile organization to enable balanced growth. The program is expected to deliver approximately $100 million in pre-tax savings over two years, with around 60% of the savings expected in 2026. Savings are ramping up in line with our plan, and we remain on track to deliver the committed savings this year. On footprint optimizations, we completed the closure of our Fieldsboro, New Jersey site and the decommissioning of select assets in Millsdale and Stalybridge during the first half. We are consolidating those volumes into more efficient sites within our network. The transition remains on track, and we are delivering the expected savings. We continue to actively evaluate opportunities to further optimize our asset base and manufacturing footprint. This includes identifying additional ways to unlock value and monetize non-productive assets. We will announce future interventions and projects once they are finalized and approved. As part of the organizational effectiveness component of Project Catalyst, we announced today a plan to reduce around 100 salaried positions across the company. This will be implemented during the third quarter. During the past few quarters, we took a disciplined and deliberate approach to minimize the impact of this action through normal attrition, pausing external hiring, and emphasizing internal talent. We are committed to supporting our affected colleagues through this transition in line with our People First culture. Looking ahead, we're executing a balanced strategy focused on top-line growth, margin expansion, and disciplined cost-out initiatives. We believe we are positioned to continue delivering growth in our key strategic businesses, including crop productivity, oil field, Tier 2 and Tier 3 surfactants, and North America polymers. Despite the ongoing significant market uncertainties and challenges, the organization remains focused on executing our growth opportunities, productivity plans, and cash generation. With these actions and our strong first half results, we believe we are well positioned to deliver full-year adjusted EBITDA growth, positive free cash flow, and continued deleveraging of the balance sheet in 2026. This concludes our prepared remarks. At this time, we would like to turn the call over for questions. Marvin, please review the instructions for the questions portion of today's call. Operator: Thank you. [Operator Instructions] And our first question comes from the line of Mike Harrison of Seaport Research Partners. Your line is now open. Michael Harrison: Congrats on a strong quarter. I'm curious, as we look at the surfactants volume up 7% organically and polymers up 5% organically, I believe you referenced that you thought there might be some pre-buying embedded in there. And just looking at those two segment-level volume numbers, I'm curious, how much of the volume strength that you saw this quarter do you think was related to pre-buying? Luis Rojo: Great question, Mike. Look, so we are very pleased with the volume growth across our three segments, right? And of course, we are significantly pleased with the $74 million of EBITDA. But I want to be very clear that we believe probably between $5 million and $10 million, so for the midpoint of $5 million to $10 million EBITDA, is in fact all the pre-buying into Q2. So, I agree that a couple of points of that is some of the pre-buying we saw because of the Iran conflict. So call it at $5 million to $10 million EBITDA from Q3 to Q2. Michael Harrison: I was hoping maybe you could give a little bit more color on the opportunity in the polymers business for spray foam. I see in the slide deck here that the volumes were up 3x year-on-year. I understand you started from a relatively small number, but where do you think that business can go in the next year or two as you presumably pick up some market share and kind of build out your position in that relatively new space? Luis Rojo: Great question, and you know we are pleased with our initiative on spray foam. We are committed to this market. This is a white space for us because, as you know, we were focused on the lamination piece. Historically it has been very strong and has been growing, you know, high single digits. So that's why we really want to participate in it. I'm not going to give you an exact forecast. I will say that I'm pleased with the 3x. Of course, it's a very low base, as you mentioned it. But the important piece here is to have a good portion of the market and grow with the market in the future. We all believe in the next 5 to 10 years, spray foam will continue growing as a market as it did in the last decade, and we want to participate out of that market growth. Michael Harrison: All right, and then just in terms of the raw material environment and what you guys are seeing in pricing, I'm curious if you can help us understand the margin impact that you saw this quarter in both surfactants and polymers related to that raw material versus pricing. Is it possible that we still haven't seen the biggest impact of inflation flowing through the P&L yet, and maybe that's going to be happening in Q3? And I guess in terms of pricing, you mentioned in your comments, Luis, that there was disciplined execution on pass-through mechanisms. And I'm just curious if you've taken a different approach on that pass-through in this inflationary environment than you did a few years ago. Luis Rojo: Great question, Mike. No, we are not taking any different approach than the past and what our contracts allow to execute. What I would say is that it's a mix of many items. There are things that are going up, there are things that are going down, like coconut oil. We talked about that a lot in the last few quarters about the escalation of CNO, and CNO actually has come down significantly. So, for example, CNO now is 13% lower than Q2 '25, but we saw the increase in all the other oil-related raw materials. And we, of course, still have inventory at the lower cost. So at the end, it's a mix of things coming down, things going up. And what I would say is, I don't think we are in a normal margin situation yet. But of course, oil goes down $10 and then goes up another $10. So we need to see how things normalize in Q3 and Q4. But on the other hand, of course, we are committed to improve our margins gradually, and we are committed to continue delivering cost savings so we provide the best value possible to our customers. That's our objective. Our objective is to always provide the best value to our customers, deliver the expected margins and return to our shareholders. So we will continue managing that balance. What I will say again is if you normalize Q2 and Q3, of course you should expect a slightly lower Q3 versus Q2 because the $74 million is inflated with volume and a little bit of margins. Michael Harrison: All right. Well, I think you maybe anticipated my last question here, which is just trying to understand some of the puts and takes around earnings or EBITDA as we're thinking about the model for the second half. You mentioned the volume pull-forward; it may have been $5 million or $10 million. You know, cost savings and Project Catalyst probably is improving as we get through the second half of the year. And then we have these price versus raw material dynamics. So any thoughts, I guess, relative to the $124 million in the first half or $74 million for EBITDA in the second quarter, how we should be thinking about third quarter and fourth quarter? Thanks. Luis Rojo: No, good questions, Mike. As you know, we don't provide full guidance and full forecast. What I will say again is the $74 million, when you think about volumes and margin, we're saying $5 million to $10 million, a little bit ahead of our original expectations for the quarter. Catalyst savings is a major component of what we are delivering this year. So this year is volume, margins, Catalyst savings. It's not only volumes and margins. Catalyst savings are playing a huge role. We committed $60 million in pre-tax savings, and we are delivering the $60 million in pre-tax savings, more than $60 million in pre-tax savings this year. So if you think the ramp-up of that, we are in a situation now where we are delivering, you know, $18 million to $20 million of savings from Project Catalyst on a quarterly basis, and we believe we can finish the year with all the interventions that we have announced in a, you know, call it a $22 million run rate savings per quarter. That doesn't take you to the full $100 million yet, and we need to keep working on it. But the majority of the savings from Project Catalyst are already executed or announced. And we need to keep looking for the other opportunities to get to the full $100 million on a run rate basis next year as we promised, you know, since day one of Catalyst. Ruben Velasquez: Mike, this is Ruben. Maybe just to complement what Luis just said in terms of what it comes. So clearly in Q2, of course, we have customers looking to secure some raw materials, and we saw that volume improvement. Of course, volume helps us with the margins together with discipline and Catalyst. That was a major component of the Q2 performance. At the same time, when we look at the future, it's important to recall we have some maintenance turnarounds that happen in the company around every four to five years, particularly on the polymer side. And that is going to be an impact of $4 million to $5 million in the second half of the year, those special turnarounds. So those are some of the dynamics that we will need to continue to monitor. Of course, uncertainty in raw materials is still there. I mean, it changes on a daily basis, as Luis mentioned. So we will continue to manage as best as possible a good balance between, you know, the pricing and the raw material dynamics until the end of the year. Michael Harrison: All right, thanks for that additional color there, Ruben. Thank you. Operator: One moment for our next question. Our next question comes from the line of Dayton Storms of Stonegate. Your line is now open. Dayton Storms: I wanted to circle back to volumes. If I remember coming out of Q1, there was a bit of a timing issue given some of the cold in the U.S. and some challenges in Asia. How much of the volume impact maybe was some of that timing issues getting sorted out in Q2 as well? Ruben Velasquez: Yes, Dayton. So yes, you remember correctly in Q1, we mentioned some impacts that we had on a year-on-year basis, timing production in some of our assets in Asia. So, as expected and as we announced, now in Q2 that reversed a little bit when you look at it on a year-on-year basis. And that's some of the benefits that we are mentioning in the release, just higher production in some of our assets in Asia, which creates a timing benefit. Of course, we do not quantify it, but that's a benefit that we saw. Dayton Storms: Very helpful. Thank you. I appreciate that. And then I did want to ask maybe one more little one around the pre-buying. Volatility isn't necessarily coming down. Do you think that there's more or are you seeing any more pre-buying in Q3, or do you believe that should be pretty strictly isolated to Q2? Luis Rojo: No, good question, Dayton, but we need to see how things, of course, develop with all the uncertainty on geopolitical. As you know, I mean, the key question here is, are we going to go back to just-in-time, or are we going to continue in a just-in-case environment? Right? Remember, before COVID, everybody managed their inventories and their logistics on a just-in-time basis. And when COVID hit, everybody moved to a just-in-case scenario. We are kind of in the middle of that right now. It is not the COVID and the pre-buying and the inventory stocking that we saw during the COVID times. But of course, people are scared about the raw material availability and people want to secure their business. So I think we are in a mix of just-in-time and just-in-case. I think it's still there and we'll see how long that mix of just-in-time and just-in-case continues. But for sure, it may take a few more months based on the conflict in Iran. Dayton Storms: That's great commentary. I appreciate it. If I could sneak in just one more. You had another strong quarter on free cash flow seasonally, and it's now two years in a row where you're, again, having strong free cash flows. I know you've been working on your debt levels. Just curious if you have any additional thoughts around cash generation. If all that goes to debt, I know you increased the dividends. Just any commentary there around capital allocation? Ruben Velasquez: Yes, absolutely. So, we continue to be very disciplined with our capital allocation and effectively during Q2, of course, given the raw material increases and given the increased sales, we did have an important investment in working capital of around $58 million in our Q2 cash flow. On the other hand, of course, cash flow from operations, when you exclude those net working capital impacts, is strong because we had margin improvement, so that is going well. And we will continue to allocate capex in the best way possible to make sure that we optimize and that we get the right balance for cash. Cash is a priority. It has been a priority, will continue to be a priority moving forward. You see how our leverage ratio has been improving consistently, and we plan to continue having that trend on our debt. Dayton Storms: Understood. Thank you for the commentary and good luck in the third quarter. Thank you. Operator: Thank you. We'll move on to our next question. Our next question comes from the line of David Silver of Equity Research Analysts. Your line is now open. David Silver: Thank you, Freedom Capital. I did want to maybe just ask for a little more color about your surfactants results this quarter. And in particular, it seems like a favorable product mix played a pretty significant role. Could you maybe just comment on progress in, I'll just call it your functional surfactants, so oil field, agriculture, and other incremental end markets? But maybe just some color about the mix improvement there, and in particular focused on your surfactant segment. Luis Rojo: David, happy to hear you. Look, we had a great performance in our surfactant business across many, many regions. It was not one, but of course, North America surfactants is our biggest business and continues and started to deliver significant growth and improvement. And when you think about the North America surfactant business, let me give you a very interesting statistic here. In the first half, we had 500 new customer-product combinations, 500 new. When you think about, you know, between new customers and new products with existing customers, that is driving very strong double-digit growth in our Tier 2, Tier 3 segment within surfactants. We are growing double digits as well in oil field. We grew significantly in Q1 in ag. We grew low single digits in Q2. I'm sure you have read all the challenges in the market with fertilizers and all of that because of the conflict in Iran. So that took the market a little bit down, but despite all of that, we were able to continue growing our ag business. So we are very pleased with our focus areas growing extremely well in functional oil field, construction and industrial solutions, and then growing significantly in Tier 2, Tier 3, especially, you know, HI&I, so industrial cleaning with all those Tier 2, Tier 3 customers. David Silver: Okay, great. Thank you for that. And then I did just want to ask a question about the stage of development or progress with Pasadena. So, the unit's been, I guess, mechanically complete for some time now, but there had been a kind of a series of startup costs and incremental expenses as that facility was ramping up. So, you know, as of June 30 or as we sit here today, I mean, how close to full utilization or how close to targeted operating efficiency are you at Pasadena regarding kind of your big new capital expansion project? Luis Rojo: Sure, we are extremely happy with our team in Pasadena. They have done an outstanding job, you know, starting up the site, ramping up production. Safety has been outstanding, you know, more than 10 years without any safety incident in Pasadena. With all the start-up, we have more than 600 contractors at one point in time and no incidents. So we're extremely pleased with what the team has done. And when you think about the ramp-up in production and safety savings, we said in the prepared remarks that we are ahead on the tolling savings that we were projecting for this year, mostly because of mix of products. And when you think about the ramp-up in production, we are almost 80% there. So between 70% and 80% of the -- 75% and 80%. So we still need to inch up the production levels in the site in 2027, but we are already pretty full, and of course, we will make it 100% full in the next few quarters. David Silver: Okay, great. Thank you. I appreciate the color. Operator: Thank you, David. This concludes the question and answer session. I'll now turn it back to Luis for closing remarks. Luis Rojo: Thank you very much for joining us on today's call. We appreciate your interest and ownership in Stepan Company. Have a great day. Operator: Thank you for your participation in today's conference. This concludes the program. You may now disconnect. Before you buy stock in Stepan, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Stepan wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Stepan (SCL) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Find winning stocks in any market cycle. Join 7 million investors using Simply Wall St's investing ideas for FREE. Stepan (SCL) is back on investor radars after the company reported stronger second quarter results, announced board and executive changes, and reaffirmed its quarterly cash dividend on July 29, 2026. See our latest analysis for Stepan. Stepan's recent governance changes and dividend affirmation have come alongside strong momentum in the share price, with a 30-day share price return of 13.18% and a year to date gain of 35.62%, while the 1-year total shareholder return of 33.94% contrasts with weaker 3 and 5 year total shareholder returns. If Stepan's recent move has you thinking about where else growth and income stories might emerge next, it could be worth scanning 20 top founder-led companies Following a sharp rebound in Stepan's share price, along with a mix of stronger quarterly earnings and a six-month loss, the balance between upside potential and downside risk has become tighter. Does the current valuation still favor new buyers? On the numbers available today, Stepan looks inexpensive on several valuation checks. The stock last closed at $63.96 and is described as trading at good value compared to peers and industry, while also sitting 60.8% below an internal fair value estimate based on future cash flows of $163.25. The key reference point here is Stepan's P/S ratio of 0.6x. This compares to an estimated fair P/S ratio of 0.6x, a peer average of 1.2x and a US Chemicals industry average of 1.1x. The internal SWS DCF model also points to Stepan at $63.96 trading below an estimated future cash flow value of $163.25, which frames the current market price as well below that model's assessment of long term cash generation potential. The P/S multiple matters for Stepan because the company is currently unprofitable, so earnings based ratios are less helpful. Using revenue helps investors compare what the market is paying for each dollar of Stepan's $2,432.79m in annual revenue, especially while net income is a loss of $2.65m and profit margins are not yet a clear guide. Against that backdrop, a P/S of 0.6x that lines up with an estimated fair P/S of 0.6x sends a clear signal. The market is pricing Stepan's revenue at a discount to sector averages, yet closely in line with where the fair ratio model suggests it could settle over time. 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Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include SCL. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Adjusted EBITDA growth of 45% was driven by a combination of 6% organic volume growth, disciplined pricing execution, and ramping productivity gains. Surfactant performance benefited from broad-based demand across all end markets, specifically led by industrial cleaning, laundry, and oil field sectors. Margin recovery was achieved through the rigorous application of contractual pass-through mechanisms and pricing actions to offset fluctuating raw material costs. The North American Polymers segment saw strong double-digit growth in rigid polyols and PA, significantly bolstered by the strategic expansion into the spray foam market. Operational excellence initiatives at the flagship Millsdale site resulted in improved production volumes and the stabilization of key operating metrics. Management attributed a portion of the quarterly volume strength to customer 'pre-buying' behaviors triggered by geopolitical uncertainty and raw material volatility. The Pasadena, Texas site reached 75% to 80% production utilization, successfully delivering supply chain savings by reducing reliance on external tolling. Project Catalyst is on track to deliver over $60 million in pre-tax savings for 2026, with a target run rate of $22 million per quarter by year-end. Management expects a $5 million to $10 million EBITDA headwind in the second half of 2026 as the Q2 customer pre-buying activity normalizes. Second-half results will be impacted by approximately $4 million to $5 million in costs related to scheduled maintenance turnarounds in the Polymers segment. The company plans to eliminate approximately 100 salaried positions in Q3 2026 to further optimize organizational effectiveness and reduce structural costs. Strategic focus remains on deleveraging the balance sheet and generating positive free cash flow despite anticipated working capital builds from higher sales. Recognized $5.1 million in pre-tax restructuring charges related to the closure of the Fieldsboro site and asset decommissioning at Millsdale and Stalybridge. Full-year restructuring charges are projected to range between $75 million and $80 million, consistent with previous efficiency program communications. Geopolitical tensions, specifically the conflict in Iran, continue to drive 'just-in-case' inventory strategies among customers, complicating demand forecasting. Corporate expenses increased 17% due to inflation and higher incentive-based compensation tied to the company's improved operating performance. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management estimated that $5 million to $10 million of Q2 EBITDA was likely pulled forward from Q3 due to geopolitical concerns. This pull-forward suggests that Q3 EBITDA may be slightly lower than Q2 when normalized for these timing effects. Spray foam volumes grew 3x year-over-year, albeit from a small base, as the company targets this 'white space' to complement its legacy lamination business. Management views spray foam as a long-term growth engine for the next 5 to 10 years and intends to capture a significant portion of the market. The company is seeing a mixed environment where coconut oil prices have dropped 13% while other oil-related raw materials have escalated. Management clarified they are not changing their pass-through approach but are focused on balancing customer value with margin recovery goals. Stepan added 500 new customer-product combinations in the first half of the year, driving double-digit growth in the Tier 2 and Tier 3 surfactant segments. This diversification strategy is successfully offsetting broader market challenges in sectors like agriculture.

3 chemical stocks to play the industry breakout Stepan (NYSE:SCL) reported higher second-quarter earnings as broad-based volume growth, margin recovery and early savings from its Project Catalyst program lifted results, while management cautioned that some demand may have been pulled forward amid geopolitical and raw-material uncertainty. Reported net income for the second quarter of 2026 was $22.9 million, or $1.00 per diluted share, compared with $11.3 million, or $0.50 per share, a year earlier. Adjusted net income increased to $27.1 million, or $1.18 per diluted share, from $12 million, or $0.52 per share, in the prior-year period. → Why SK hynix Could Be the Best AI Chip Stock to Buy Now Net sales rose 15% year over year to $684 million. President and Chief Executive Officer Luis Rojo said higher selling prices, increased volumes, favorable product and customer mix, and favorable currency translation contributed to the sales increase. Adjusted EBITDA rose 45% to $74.4 million, while organic volume increased 6% across the company. Rojo said the company’s second-quarter performance reflected contributions from volume growth, margin recovery and productivity initiatives. Pricing actions and contractual pass-through mechanisms helped offset higher raw-material costs, he said, while Project Catalyst savings were ramping in line with the company’s plan. → 3 Value ETFs to Consider as Growth Stocks Lag Behind However, management said some of the quarter’s sales strength may have reflected customer inventory building. Rojo estimated that pre-buying tied to uncertainty surrounding the Iran conflict and raw-material availability represented roughly $5 million to $10 million of EBITDA in the second quarter. “We are considering that potential timing effect as we plan for the second half of 2026,” Rojo said in prepared remarks. During the question-and-answer session, he added that the company expects third-quarter results to be somewhat lower than the second quarter after accounting for the elevated volume and margin contribution. → 5 AI Stocks Are Pulling Back—Which Growth Catalysts Still Look Strongest? Chief Financial Officer Ruben Velasquez said the company also expects special maintenance turnarounds, particularly in Polymers, to reduce second-half results by approximately $4 million to $5 million. The Surfactants segment reported net sales of $484 million, up 18% from a year earlier. Selling prices increased 12%, largely reflecting raw-material pass-throughs, product and customer mix, and pricing actions. Reported volume rose 3%, while organic volume increased 7%; currency translation added 4% to sales. Surfactants adjusted EBITDA increased 59% to $55 million. The company cited broad-based volume growth, Project Catalyst savings and recovery from production-timing and absorption impacts discussed in the first quarter. Industrial cleaning, laundry, construction and industrial applications, and oil field were among the leading growth areas. Rojo highlighted growth in the company’s Tier 2 and Tier 3 customer base, saying the business generated 500 new customer-product combinations during the first half. He also said Stepan recorded double-digit growth in oil field and continued growth in agriculture despite market challenges related to fertilizers and the Iran conflict. Polymers sales increased 9% to $178 million, with selling prices up 3% and volume up 5%. North American volume grew by strong double digits, driven by Rigid Polyols and Phthalic Anhydride, including significant growth in spray foam products. Those gains were partly offset by lower volumes in Europe and Asia. Polymers adjusted EBITDA rose 22% to $31 million, primarily on volume growth and margin recovery. North American EBITDA increased by $5 million, while Europe improved modestly as better margins offset continued soft construction demand. Asia was slightly lower because of softer demand in China. Specialty Products sales rose 8% to $22 million, while volume increased 4%. Adjusted EBITDA was slightly lower at $6.5 million due to a less favorable product mix in medium-chain triglycerides. Stepan said Project Catalyst is expected to produce approximately $100 million in pre-tax savings over two years, with about 60% of the savings anticipated in 2026. Rojo said the company remains on track to exceed its commitment of $60 million in pre-tax savings this year and is currently realizing approximately $18 million to $20 million in savings per quarter. The company expects to exit 2026 at a quarterly savings run rate of about $22 million, according to Rojo. He said most of the program’s savings actions have already been executed or announced, though Stepan continues to identify additional initiatives needed to reach the full $100 million run-rate target next year. During the first half, Stepan completed the closure of its Fieldsboro, New Jersey, site and decommissioned select assets at Millsdale, Illinois, and Stalybridge, United Kingdom. The company is transferring volumes to other facilities in its network. Velasquez said reported second-quarter results included a $5.1 million pre-tax restructuring charge, primarily tied to those actions. Stepan expects full-year restructuring charges of $75 million to $80 million. The company also announced plans to reduce approximately 100 salaried positions in the third quarter, with most associated expenses expected to be recognized in the second half. Free cash flow was negative $15 million in the quarter after $23 million of capital expenditures and a $58 million working-capital build tied to stronger sales and higher raw-material costs. Cash from operations before working-capital changes was $56 million, including approximately $6 million of cash restructuring costs. Net debt ended the quarter at $534 million, and net leverage improved to 2.5 times from 2.7 times in the first quarter and 2.9 times a year earlier. The company paid $9 million in dividends during the quarter and said it remains focused on cash generation, deleveraging and disciplined capital allocation. Rojo said Stepan expects to deliver full-year adjusted EBITDA growth, positive free cash flow and continued balance-sheet deleveraging in 2026, while navigating ongoing uncertainty in raw materials and global markets. Stepan Company is a global manufacturer of specialty and intermediate chemicals, primarily known for its development and production of surfactants and related specialty products. The company's portfolio includes a wide range of ingredients used to enhance the performance of consumer and industrial formulations, such as emulsifiers, foam control agents, odor control agents, antimicrobial products and performance additives. These products are integral components in cleaning solutions, personal care items, agrochemical formulations, coatings, oilfield treatments and polymer systems. Serving a diverse set of end-markets, Stepan's offerings address both consumer-facing and industrial applications. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Stepan Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

This article first appeared on GuruFocus. Release Date: July 29, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Stepan Co (NYSE:SCL) reported a 45% increase in adjusted EBITDA, reaching $74 million, driven by volume growth, margin recovery, and Project Catalyst savings. Organic volume grew by 6% across all markets, with significant growth in strategic end markets. Net sales increased by 15% to $684 million, reflecting higher selling prices, volume growth, and favorable currency translation. The company achieved a net leverage ratio of 2.5 times, showing improvement in cash generation and balance sheet deleveraging. Project Catalyst is on track to deliver $100 million in pre-tax savings over two years, with 60% expected in 2026. Stepan Co (NYSE:SCL) experienced higher corporate expenses, which increased by 17% due to inflation and incentive-based compensation. The company anticipates full-year restructuring charges between $75 to $80 million, impacting financial results. There is uncertainty regarding the impact of inflation on raw materials, which may affect margins in the coming quarters. The company noted potential pre-buying effects due to geopolitical and raw material uncertainties, which could impact future demand. Maintenance turnarounds in the polymer segment are expected to impact earnings by $4 to $5 million in the second half of the year. Warning! GuruFocus has detected 7 Warning Signs with SCL. Is SCL fairly valued? Test your thesis with our free DCF calculator. Q: How much of the volume strength in surfactants and polymers was related to pre-buying? A: Luis Rojo, President and CEO, stated that they believe between $5 million and $10 million of EBITDA was due to pre-buying, likely influenced by the Iran conflict. Q: Can you provide more color on the opportunity in the polymer business for spray foam? A: Luis Rojo mentioned that the spray foam market is a new space for them, with volumes up 3x year-on-year. They are committed to this market, which has historically grown at high single digits, and they aim to capture a significant portion of this growth over the next 5 to 10 years. Q: What is the impact of raw material pricing on margins, and have you changed your approach to pass-through mechanisms? A: Luis Rojo explained that they have not changed their approach to pass-through mechanisms. The margin impact is a mix of rising and falling raw material costs, such as coconut oil, which has decreased by 13% compared to Q2 2025. They are committed to gradually improving margins and delivering cost savings. Q: How should we think about earnings or EBITDA for the second half of the year? A: Ruben Vasquez, CFO, noted that while they don't provide full guidance, the $74 million in Q2 was slightly ahead of expectations due to volume and margin improvements. Project Catalyst savings are a significant component, with $18 to $20 million in quarterly savings expected to increase to a $22 million run rate by year-end. Q: Can you provide more details on the surfactants segment's performance and product mix improvement? A: Luis Rojo highlighted strong performance across regions, particularly in North America, with 500 new customer-product combinations driving double-digit growth in tier 2 and tier 3 segments. They also saw growth in oil field and agricultural markets despite challenges. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Stepan Co. (SCL) came out with quarterly earnings of $1.18 per share, beating the Zacks Consensus Estimate of $0.61 per share. This compares to earnings of $0.52 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +93.44%. A quarter ago, it was expected that this specialty chemicals company would post earnings of $0.21 per share when it actually produced earnings of $0.45, delivering a surprise of +114.29%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Stepan Co., which belongs to the Zacks Chemical - Diversified industry, posted revenues of $684.11 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 7.59%. This compares to year-ago revenues of $594.69 million. The company has topped consensus revenue estimates two times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Stepan Co. shares have added about 22.5% since the beginning of the year versus the S&P 500's gain of 8.5%. While Stepan Co. has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Stepan Co. was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.93 on $654.1 million in revenues for the coming quarter and $2.54 on $2.51 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Chemical - Diversified is currently in the top 39% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, Avient (AVNT), is yet to report results for the quarter ended June 2026. The results are expected to be released on August 6. This maker of resins used in plastic pipe and other products is expected to post quarterly earnings of $0.89 per share in its upcoming report, which represents a year-over-year change of +11.3%. The consensus EPS estimate for the quarter has been revised 0.3% lower over the last 30 days to the current level. Avient's revenues are expected to be $895.27 million, up 3.3% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Stepan Company (SCL) : Free Stock Analysis Report Avient Corporation (AVNT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

NORTHBROOK, Ill., July 29, 2026 /PRNewswire/ -- Stepan Company (NYSE: SCL) today reported: Second Quarter 2026 Highlights Reported net income was $22.9 million, up 102% versus the prior year. Adjusted net income(1) was $27.1 million, up 126% versus the prior year. EBITDA(2) was $69.1 million and Adjusted EBITDA(2) was $74.4 million, up 37% and 45% respectively, year-over-year. Global sales volume was up 3% year-over-year. Organic sales volume was up 6% year-over-year. Cash from Operations was $8.4 million during the quarter. Free cash flow(3) for the quarter was a negative $15.0 million, driven by higher working capital requirements. Excluding the impact of higher working capital, free cash flow was $32.7 million, up 69% versus the prior year. Pre-tax earnings include a $5.1 million restructuring charge largely related to the previously announced closure of the Company's Fieldsboro, NJ site and decommissioning of select assets at its Elwood (Millsdale), IL and Stalybridge, UK facilities. The Company announced today a plan to reduce its global salaried workforce by approximately 100 positions. This action is part of the previously announced Project Catalyst efficiency initiative. The majority of this restructuring expense is expected to be recognized during the second half of 2026. The Company anticipates full year restructuring charges in the range of $75.0 to $80.0 million, which is in line with prior communications, with a projected cash impact between $14.0 and $18.0 million. First Half 2026 Highlights Reported net income was a $18.5 million loss versus $31.1 million of income in the prior year. The current year loss is entirely due to a $70.5 million pre-tax restructuring charge. The cash impact associated with this restructuring charge was approximately $7.0 million year-to-date. Adjusted net income(1) was $37.4 million, up 20% versus the prior year. EBITDA(2) was $52.7 million and Adjusted EBITDA(2) was $124.1 million. Adjusted EBITDA was up 14% year-over-year. Organic sales volume was up 3% year-over-year. "Quarterly earnings were up significantly driven by improved Surfactant and Polymer results. Second quarter adjusted EBITDA of $74.4 million was up 45% year-over-year due to global volume growth, margin recovery and Project Catalyst savings. We believe the quarter also benefited from customer pre-buys as a result of the global geopolitical situation. Surfactant and Polymer adjusted EBITDA were up 59% and 22%, respectively," said Luis E. Rojo, President and Chief Executive Officer. "Surfactant organic sales volume was up 7% and Polymer sales volume was up 5% in the quarter. The Surfactant volume growth was broad-based and across all end markets and all regions. Within Polymers, the North American Rigid and Phthalic Anhydride businesses delivered double digit volume growth. We are pleased with the growth we achieved in several of our key strategic end markets despite ongoing global economic uncertainties and supply chain disruptions. We continue to execute Project Catalyst safely and in line with expectations. As part of the organizational-effectiveness component of Project Catalyst, today we announced a plan to reduce the Company's global salaried workforce by around 100 roles before the end of the year. During the past few quarters, we took a disciplined and deliberate approach to minimize the impact of these actions through normal attrition, pausing external hiring and emphasizing internal talent. We are committed to supporting our affected colleagues through this transition in line with our People First culture." Financial Summary Percentage Change in Net Sales Net sales in the second quarter of 2026 increased 15% year-over-year. This increase reflects higher selling prices, mainly attributable to the pass-through of higher raw material costs and more favorable product mix, a 3% increase in sales volume and the favorable impact of foreign currency translation. Organic sales volume was up 6% year-over-year. Segment Results Consolidated adjusted EBITDA(2) increased $23.0 million, or 45%, in the quarter. This increase was primarily due to higher Surfactant and Polymer earnings driven by sales volume growth and margin recovery. Surfactant net sales were $483.9 million for the quarter, up 18% versus the prior year. Selling prices were up 12% primarily due to pass through of higher raw material costs, improved product and customer mix, along with pricing actions. Global Sales volume was up 2% and organic sales volume increased 7%. All global regions recognized organic volume growth and our strategic end markets combined grew high single digits. Foreign currency translation positively impacted net sales by 4%. Surfactant adjusted EBITDA(2) for the quarter increased $20.4 million, or 59%, versus the prior year. This increase was primarily due to sales volume growth and margin recovery. Polymer net sales were $178.0 million for the quarter, a 9% increase versus the prior year. Selling prices were up 3%, primarily due to the pass-through of higher raw material costs and margin recovery. Sales volume increased 5% in the quarter. North American sales volume was up double digits, inclusive of significant growth in Spray Foam, partially offset by lower volumes in Europe and Asia. Foreign currency translation positively impacted net sales by 1% during the quarter. Polymer adjusted EBITDA(2) increased $5.6 million, or 22%, versus the prior year primarily due to sales volume growth and global margin improvement. Specialty Products net sales were $22.2 million for the quarter, an 8% increase versus the prior year. Specialty Products volume increased 4% while adjusted EBITDA(2) decreased $0.2 million, or 3%. The slight decrease in adjusted EBITDA(2) was primarily due to less favorable product mix within the medium chain triglycerides product line that was mostly offset by higher earnings in the food and flavor business. Outlook "We believe we are positioned to continue delivering growth in all our key strategic businesses such as Crop Productivity, Oilfield, Tier 2/3 Surfactants and North American Polymers. We continue to execute on Project Catalyst, which is our comprehensive plan designed to further optimize our asset base and create a more productive and agile organization to enable balanced growth," said Luis E. Rojo, President and Chief Executive Officer. "Despite the ongoing and significant market uncertainties and challenges, the organization is focused on executing our growth opportunities, productivity plans and cash interventions. With these actions and the strong first half results, we believe we will deliver full year Adjusted EBITDA growth, positive free cash flow and continue to de-leverage the balance sheet in 2026." Notes (1) Adjusted net income and adjusted earnings per share are non-GAAP measures which exclude deferred compensation income/expense, certain environmental remediation-related costs as well as other significant and infrequent/non-recurring items. See Table II for reconciliations of non-GAAP adjusted net income and adjusted earnings per diluted share. (2) EBITDA and adjusted EBITDA are non-GAAP measures. See Table VI for calculations and GAAP reconciliations of EBITDA and adjusted EBITDA. (3) Free cash flow is a non-GAAP measure and reflects cash generated from operations minus capital expenditures. Cash generated from operations was $8.4 million during the second quarter of 2026 and capital expenditures were $23.4 million. Conference Call Stepan Company will host a conference call to discuss its second quarter results at 9:00 a.m. ET (8:00 a.m. CT) on July 29, 2026. The call can be accessed by phone and webcast. To access the call by phone, please click on this Registration Link, complete the form and you will be provided with dial in details and a PIN. To avoid delays, we encourage participants to dial into the conference call ten minutes ahead of the scheduled start time. The webcast can be accessed through the Investors/Conference Calls page at www.stepan.com. A webcast replay of the conference call will be available at the same location shortly after the call. Supporting Slides Slides supporting this press release will be made available at www.stepan.com through the Investors/Presentations page at approximately the same time as this press release is issued. Corporate Profile Stepan Company is a major manufacturer of specialty and intermediate chemicals used in a broad range of industries. Stepan is a leading merchant producer of surfactants, which are the key ingredients in consumer and industrial cleaning and disinfection compounds and in agricultural and oilfield solutions. The Company is also a leading supplier of polyurethane polyols used in the expanding thermal insulation market, and CASE (Coatings, Adhesives, Sealants, and Elastomers) industries. Headquartered in Northbrook, Illinois, Stepan utilizes a network of modern production facilities located in North and South America, Europe and Asia. The Company's common stock is traded on the New York Stock Exchange (NYSE) under the symbol SCL. For more information about Stepan Company please visit the Company online at www.stepan.com More information about Stepan's sustainability program can be found on the Sustainability page at www.stepan.com Certain information in this news release consists of forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include statements about Stepan Company's plans, objectives, strategies, financial performance and outlook, trends, the amount and timing of future cash distributions, prospects or future events and involve known and unknown risks that are difficult to predict. As a result, Stepan Company's actual financial results, performance, achievements or prospects may differ materially from those expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements by the use of words such as "may," "could," "expect," "intend," "plan," "seek," "anticipate," "believe," "estimate," "guidance," "predict," "potential," "continue," "likely," "will," "would," "should," "illustrative" and variations of these terms and similar expressions, or the negative of these terms or similar expressions. Such forward-looking statements are necessarily based upon estimates and assumptions that, while considered reasonable by Stepan Company and its management based on their knowledge and understanding of the business and industry, are inherently uncertain. These statements are not guarantees of future performance, and stockholders should not place undue reliance on forward-looking statements. There are a number of risks, uncertainties and other important factors, many of which are beyond Stepan Company's control, that could cause actual results to differ materially from the forward-looking statements contained in this news release. Such risks, uncertainties and other important factors include, among other factors, the risks, uncertainties and factors described in Stepan Company's Form 10-K, Form 10-Q and Form 8-K reports and exhibits to those reports, and include (but are not limited to) risks and uncertainties related to our ability to realize cost savings or operating efficiencies associated with strategic initiatives, including Project Catalyst; accidents, unplanned production shutdowns or disruptions in manufacturing facilities; reduced demand due to customer product reformulations or new technologies; our inability to successfully develop or introduce new products; compliance with laws and other legal restrictions, including those relating to the international scope of our business; domestic and global competition; volatility of raw material and energy costs and supply; disruptions in transportation or significant changes in transportation costs; downturns in certain industries and general economic downturns; international business risks, including changes in global trade policies, tariffs and retaliatory measures and countermeasures; currency exchange rate fluctuations; changes in tax policy and potential adverse tax consequences due to the international scope of our business; downgrades in our credit ratings or our ability to access the credit or capital markets if and when necessary; global political, military, security or other instability and increased security regulations; costs, delays and miscalculations in capacity needs related to expansion or other capital projects; interruption or breaches of information technology systems; unfavorable resolution of litigation against us; maintaining and protecting intellectual property rights; our ability to identify suitable acquisition candidates and successfully complete and integrate acquisitions; our ability to retain executive management and key personnel; and issues relating to compliance with our debt covenants. In addition to the risks described in the Company's periodic reports, the restructuring actions described herein may involve risks related to the execution of facility closures and asset decommissioning, potential operational disruptions, impacts on employees and local communities, environmental compliance, and the realization of anticipated cost savings and efficiencies. These forward-looking statements are made only as of the date hereof, and Stepan Company undertakes no obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by applicable laws. * * * * * Tables follow The Company believes that certain non-GAAP measures, in conjunction with comparable GAAP measures, are useful for evaluating the Company's operating performance and financial condition. The Company uses this non-GAAP information as an indicator of business performance and evaluates management's effectiveness with specific reference to these indicators. Management believes that these non-GAAP financial measures provide useful supplemental information because they exclude non-operational items that affect comparability between years. These measures should be considered in addition to, not as substitutes for or superior to, measures of financial performance prepared in accordance with GAAP and may differ from similarly titled measures presented by other companies. The Company's Annual Report on Form 10-K for the year ended December 31, 2025 contains additional information regarding the use of non-GAAP financial measures. Summary of Second Quarter 2026 Adjusted Net Income Items Adjusted net income excludes non-operational deferred compensation income/expense, certain environmental remediation costs and other significant and infrequent or non-recurring items. Deferred Compensation: The second quarter of 2026 reported net income includes $0.1 million of after-tax expense versus $0.1 million of after-tax expense in the prior year. Environmental Remediation: The second quarter of 2026 reported net income includes $0.1 million of after-tax expense versus $0.5 million of after-tax expense in the prior year. Business Restructuring: The second quarter of 2026 reported net income includes $4.0 million of after-tax expense related to restructuring charges. There were no restructuring charges recognized in the prior year quarter. $70,545$- Total Pre-Tax Adjustments$5,295$814$71,464$280Cumulative Tax Effect on Adjustments$(1,154)$(203)$(15,604)$(70)After-Tax Adjustments$4,141$0.18$611$0.02$55,860$2.44$210$0.01 Effects of Foreign Currency Translation The Company's foreign subsidiaries transact business and report financial results in their respective local currencies. These results are translated into U.S. dollars at average foreign exchange rates appropriate for the reporting period. The table below presents the impact that foreign currency translation had on select income statement line items. Corporate Expenses Adjusted Corporate expenses increased $2.7 million, or 17% for the quarter. This increase was primarily due to higher incentive-based compensation expenses. Selected Balance Sheet Information The Company's total debt decreased by $4.3 million and cash decreased by $27.1 million versus March 31, 2026. The Company's net debt level increased $22.8 million versus March 31, 2026 and its net debt ratio was 31% versus 30% in the prior quarter (Net Debt and Net Debt Ratio are non-GAAP measures, reconciliations of which are shown in the table below). Management uses the non-GAAP net debt metric to show a more complete picture of the Company's overall liquidity, financial flexibility and leverage level. The major working capital components were: View original content to download multimedia:https://www.prnewswire.com/news-releases/stepan-reports-second-quarter-2026-results-302837410.html

NORTHBROOK, Ill., July 29, 2026 /PRNewswire/ -- Stepan Company (NYSE: SCL) today reported: The Board of Directors of Stepan Company has declared a quarterly cash dividend on the Company's common stock of $0.395 per share. The dividend is payable on September 15, 2026, to common stockholders of record on September 1, 2026. The Company increased its quarterly cash dividend in the fourth quarter of 2025 by $0.010 per share, marking the 58th consecutive year that the Company has increased its cash dividend to stockholders. Corporate ProfileStepan Company is a major manufacturer of specialty and intermediate chemicals used in a broad range of industries. Stepan is a leading merchant producer of surfactants, which are the key ingredients in consumer and industrial cleaning and disinfection products and in agricultural and oilfield solutions. The Company is also a leading supplier of polyurethane polyols used in the expanding thermal insulation market, and CASE (Coatings, Adhesives, Sealants, and Elastomers) industries. Headquartered in Northbrook, Illinois, Stepan utilizes a network of modern production facilities located in North and South America, Europe and Asia. The Company's common stock is traded on the New York Stock Exchange (NYSE) under the symbol SCL. For more information about Stepan Company please visit the Company online at www.stepan.com. More information about Stepan's sustainability program can be found on the Sustainability page at www.stepan.com. Certain information in this news release consists of forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include statements about Stepan Company's plans, objectives, strategies, financial performance and outlook, trends, the amount and timing of future cash distributions, prospects or future events and involve known and unknown risks that are difficult to predict. As a result, Stepan Company's actual financial results, performance, achievements or prospects may differ materially from those expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements by the use of words such as "may," "could," "expect," "intend," "plan," "seek," "anticipate," "believe," "estimate," "guidance," "predict," "potential," "continue," "likely," "will," "would," "should," "illustrative" and variations of these terms and similar expressions, or the negative of these terms or similar expressions. Such forward-looking statements are necessarily based upon estimates and assumptions that, while considered reasonable by Stepan Company and its management based on their knowledge and understanding of the business and industry, are inherently uncertain. These statements are not guarantees of future performance, and stockholders should not place undue reliance on forward-looking statements. There are a number of risks, uncertainties and other important factors, many of which are beyond Stepan Company's control, that could cause actual results to differ materially from the forward-looking statements contained in this news release. Such risks, uncertainties and other important factors include, among other factors, the risks, uncertainties and factors described in Stepan Company's Form 10-K, Form 10-Q and Form 8-K reports and exhibits to those reports, and include (but are not limited to) risks and uncertainties related to: our ability to realize cost savings or operating efficiencies associated with strategic initiatives, including Project Catalyst; risks related to restructuring activities, including the execution of facility closures and asset, decommissioning, potential operational disruptions, impacts on employees and local, communities, and environmental compliance; accidents, unplanned production shutdowns, interruptions or disruptions in manufacturing facilities; reduced demand due to customer product reformulations or new technologies; our inability to successfully develop or introduce new products; compliance with laws and other legal restrictions, including those relating to the international scope of our business; domestic and global competition; volatility of raw material and energy costs and supply; disruptions in transportation or significant changes in transportation costs; downturns in certain industries and general economic downturns; international business risks, including changes in global trade policies, tariffs, and retaliatory measures and countermeasures; currency exchange rate fluctuations; changes in tax policy and potential adverse tax consequences due to the international scope of our business; downgrades in our credit ratings or our ability to access the credit or capital markets if and when necessary; global political, military, security or other instability and increased security regulations; costs, delays and miscalculations in capacity needs related to expansion or other capital projects; interruption or breaches of information technology systems; unfavorable resolution of litigation against us; maintaining and protecting intellectual property rights; our ability to identify suitable acquisition candidates and successfully complete and integrate acquisitions; our ability to retain executive management and key personnel; and issues relating to compliance with our debt covenants. These forward-looking statements are made only as of the date hereof, and Stepan Company undertakes no obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise. View original content to download multimedia:https://www.prnewswire.com/news-releases/stepan-declares-quarterly-dividend-302837355.html

NORTHBROOK, Ill., July 8, 2026 /PRNewswire/ -- Stepan Company (NYSE: SCL) will issue its second quarter 2026 earnings results on Wednesday, July 29, 2026 at approximately 7:00 a.m. ET (6:00 a.m. CT). Supporting slides will be posted at approximately the same time on the Investors/Presentations page at www.stepan.com. The Company will hold a conference call to discuss and answer questions about its financial and operational performance on the same day at 9:00 a.m. ET (8:00 a.m. CT). The call will be hosted by Luis E. Rojo, President and Chief Executive Officer, and Ruben Velasquez, Vice President and Chief Financial Officer. The call can be accessed by phone and webcast. To access the call by phone, please click on this Registration Link, complete the form and you will be provided with dial in details and a PIN. To avoid delays, we encourage participants to dial into the conference call ten minutes ahead of the scheduled start time. The webcast can be accessed through the Investors/Conference Calls page at www.stepan.com. A webcast replay of the conference call will be available at the same location shortly after the call. Corporate ProfileStepan Company is a major manufacturer of specialty and intermediate chemicals used in a broad range of industries. Stepan is a leading merchant producer of surfactants, which are the key ingredients in consumer and industrial cleaning and disinfection products and in agricultural and oilfield solutions. The Company is also a leading supplier of polyurethane polyols used in the expanding thermal insulation market, and CASE (Coatings, Adhesives, Sealants, and Elastomers) industries. Headquartered in Northbrook, Illinois, Stepan utilizes a network of modern production facilities located in North and South America, Europe and Asia. The Company's common stock is traded on the New York Stock Exchange (NYSE) under the symbol SCL. For more information about Stepan Company please visit the Company online at www.stepan.com. More information about Stepan's sustainability program can be found on the Sustainability page at www.stepan.com. Certain information in this news release consists of forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include statements about Stepan Company's plans, objectives, strategies, financial performance and outlook, trends, the amount and timing of future cash distributions, prospects or future events and involve known and unknown risks that are difficult to predict. As a result, Stepan Company's actual financial results, performance, achievements or prospects may differ materially from those expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements by the use of words such as "may," "could," "expect," "intend," "plan," "seek," "anticipate," "believe," "estimate," "guidance," "predict," "potential," "continue," "likely," "will," "would," "should," "illustrative" and variations of these terms and similar expressions, or the negative of these terms or similar expressions. Such forward-looking statements are necessarily based upon estimates and assumptions that, while considered reasonable by Stepan Company and its management based on their knowledge and understanding of the business and industry, are inherently uncertain. These statements are not guarantees of future performance, and stockholders should not place undue reliance on forward-looking statements. There are a number of risks, uncertainties and other important factors, many of which are beyond Stepan Company's control, that could cause actual results to differ materially from the forward-looking statements contained in this news release. Such risks, uncertainties and other important factors include, among other factors, the risks, uncertainties and factors described in Stepan Company's Form 10-K, Form 10-Q and Form 8-K reports and exhibits to those reports, and include (but are not limited to) risks and uncertainties related to accidents, unplanned production shutdowns or disruptions in manufacturing facilities; reduced demand due to customer product reformulations or new technologies; our inability to successfully develop or introduce new products; our ability to realize cost savings or operating efficiencies associated with strategic initiatives; compliance with laws; our ability to identify suitable acquisition candidates and successfully complete and integrate acquisitions; global competition; volatility of raw material and energy costs and supply; disruptions in transportation or significant changes in transportation costs; downturns in certain industries and general economic downturns; international business risks, including currency exchange rate fluctuations, legal restrictions and taxes; unfavorable resolution of litigation against us; maintaining and protecting intellectual property rights; our ability to access capital markets; global political, military, security or other instability; costs related to expansion or other capital projects; interruption or breaches of information technology systems; our ability to retain executive management and key personnel; and our debt covenants. These forward-looking statements are made only as of the date hereof, and Stepan Company undertakes no obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise. View original content to download multimedia:https://www.prnewswire.com/news-releases/stepan-to-announce-second-quarter-2026-results-on-july-29-2026-302820175.html