Financial Performance - Consolidated net sales for the third quarter of 2025 increased by $43.4 million, or 8%, compared to the same period in 2024, driven by higher average selling prices and increased sales volume in Polymers and Specialty Products[94]. - Net income for the third quarter of 2025 was $10.8 million, or $0.47 per diluted share, down from $23.6 million, or $1.03 per diluted share, in the third quarter of 2024[93]. - EBITDA for the third quarter of 2025 was $56.1 million, reflecting a 6% increase from $53.0 million in the same quarter of 2024[93]. - Total net sales for Q3 2025 were $590.3 million, an increase of $43.4 million or 8% compared to Q3 2024[101]. - Operating income for the total company decreased by $2.2 million, or 9%, to $21.8 million in Q3 2025[101]. - Adjusted net income for the nine months ended September 30, 2025, was $42.2 million, compared to $47.7 million for the same period in 2024[172]. - Net income for the first nine months of 2025 was $41.9 million, or $1.83 per diluted share, compared to $47.0 million, or $2.05 per diluted share, in the same period of 2024[121]. Segment Performance - Surfactants accounted for 72% of consolidated net sales for the first nine months of 2025, while Polymers and Specialty Products accounted for 25% and 3%, respectively[87][88][89]. - Surfactants segment net sales increased by $39.6 million, or 10%, driven by higher average selling prices, which contributed $41.4 million[102]. - Polymers segment net sales decreased by $5.9 million, or 4%, primarily due to lower average selling prices impacting sales by $21.3 million[110]. - Specialty Products segment net sales increased by $9.7 million, or 68%, compared to the prior year[101]. - Specialty Products net sales increased by $15.0 million, or 32 percent, due to higher average selling prices and a 14 percent increase in sales volume[148]. - Surfactant net sales for the first nine months of 2025 increased by $110.8 million, or 10%, with higher average selling prices contributing $129.4 million to this increase[131]. Operating Income and Expenses - Operating income for the third quarter of 2025 decreased by $2.1 million, or 9%, compared to the third quarter of 2024, with declines in Surfactant and Polymer operating incomes[95]. - Surfactants operating income fell by $10.6 million, or 40%, with gross profit decreasing by $9.5 million, or 19%[106]. - Polymer operating income in Q3 2025 decreased by $1.1 million, or 8%, compared to Q3 2024, with gross profit down by $0.9 million, or 4%[114]. - Research and development expenses increased by $0.7 million, or 5%, year-over-year[98]. - Corporate expenses decreased by $3.7 million, or 17%, year-over-year, primarily due to the non-recurrence of prior year charges related to an external fraud event[95]. Tax and Interest - The effective tax rate rose to 34.4% in Q3 2025 from a negative 10.7% in Q3 2024, primarily due to an unfavorable provision-to-return adjustment[98]. - Net interest expense for the third quarter of 2025 increased by $3.2 million compared to the third quarter of 2024, primarily due to lower capitalized interest income[96]. Cash Flow and Capital Expenditures - Cash and cash equivalents increased by $18.9 million compared to December 31, 2024, totaling $118.5 million as of September 30, 2025[152]. - Cash used for capital expenditures was $87.9 million in the first nine months of 2025, with total capital expenditures estimated to be between $118.0 million and $123.0 million for the year[156]. - Operating activities generated a cash source of $87.9 million for the first nine months of 2025, compared to $93.8 million for the same period in 2024[151]. Debt and Financial Position - Consolidated balance sheet debt increased by $30.1 million, from $625.4 million on December 31, 2024, to $655.5 million on September 30, 2025, primarily due to the issuance of $75.0 million of senior unsecured notes[159]. - Net debt was $537.0 million on September 30, 2025, compared to $525.7 million at December 31, 2024, with a net debt to net debt plus shareholders' equity ratio of 30.1%[160]. - The Company maintains a credit agreement providing for credit facilities in an initial aggregate principal amount of $450.0 million, maturing on June 24, 2027[161]. - The Company's net debt to net debt plus equity ratio improved to 30% as of September 30, 2025, compared to 31% at the end of 2024[176]. Environmental and Legal Matters - Environmental expenditures for capital projects were $7.2 million for the first nine months of 2025, compared to $7.0 million for the same period in 2024[166]. - The Company accrued an additional $1.8 million for remediation expenses in the second quarter of 2025 due to a change in the scope of planned remediation activities[167]. - The Company's environmental and legal accruals totaled $19.4 million at September 30, 2025, compared to $20.0 million at December 31, 2024[167]. Market Risks - There have been no material changes to the market risks as described in the Company's 2024 Annual Report on Form 10-K[177].

SouthernSun Asset Management, LLC, an investment management firm, released its “SouthernSun Small Cap Strategy” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the third quarter, the strategy returned 11.73% on a gross basis (11.52% net) compared to a 12.39% return for the Russell 2000 Index and 12.60% for the Russell 2000 Value Index. The strategy returned -0.66% on a gross basis (-0.10% net) for the trailing twelve months compared to 10.76% and 7.88% respectively for th ...

Stepan Company (NYSE:SCL) Q3 2025 Earnings Call October 29, 2025 09:00 AM ET Company ParticipantsRuben Velasquez - VP and CFOLuis Rojo - CEOConference Call ParticipantsMichael Harrison - AnalystDavid Storms - AnalystOperatorGood morning and welcome to the Stepan Company Third Quarter 2025 Earnings Conference call. During the presentation, all participants will be in a listen-only mode. Afterward, we will conduct a question and answer session. To ask a question during this session, you will need to press sta ...

Financial Data and Key Metrics Changes - Adjusted EBITDA for the first nine months of 2025 grew by 9%, reaching $165 million, despite challenges from rising oil chemical raw material prices and higher startup costs related to the new Pasadena facility [3][4] - Third quarter adjusted EBITDA was $56 million, a 6% increase year-on-year [4][8] - Adjusted net income for the third quarter was $10.9 million, down 54% from $23.7 million in the prior year, primarily due to a higher effective tax rate and increased depreciation [5][7] Business Line Data and Key Metrics Changes - Specialty Products adjusted EBITDA increased significantly, driven by favorable order timing within the pharmaceutical business, with net sales rising 68% year-on-year [4][12] - Polymers net sales decreased by 4% to $143.9 million, although sales volume increased by 8% [11][12] - Surfactants net sales were $422.4 million, a 10% increase, but adjusted EBITDA decreased by 14% due to higher startup costs and raw material price inflation [10][11] Market Data and Key Metrics Changes - North America rigid polyol and commodity PA volumes both grew by double digits, while European rigid polyol volumes were impacted by macroeconomic uncertainties [5][11] - The company experienced double-digit volume growth in the crop productivity business and mid-single-digit growth in the oil field end market, but faced lower demand in global commodity consumer products [4][5] Company Strategy and Development Direction - The company remains focused on gradually recovering margins while balancing volumes and margins [4][16] - The new Pasadena facility is fully operational and expected to contribute fully by 2026, enhancing production capabilities [15][16] - The company is analyzing opportunities to optimize its global footprint and asset base, including the planned sale of its site in the Philippines [16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about delivering full-year adjusted EBITDA growth and positive free cash flow in 2025 despite ongoing market uncertainties [16] - The company aims to maintain a competitive balance between volumes and margins, particularly in the surfactants business [22][24] Other Important Information - Free cash flow was positive at $40 million during the quarter, driven by reduced working capital and disciplined capital spending [5][12] - The Board declared a quarterly cash dividend of $0.395 per share, marking a 2.6% increase [6] Q&A Session Summary Question: Recovery of oil chemicals cost in surfactants - Management noted that coconut oil prices have increased by 70% compared to 2024, but prices are now coming down, and they aim to recover margins by 2026 [21] Question: Pricing challenges with lower raw material costs - Management emphasized the importance of balancing volumes and margins and stated they will remain competitive in the market [22] Question: Long-term margin goals for surfactants - Management believes that surfactants can achieve healthy double-digit EBITDA margins as they grow in functional markets [24] Question: Pent-up demand in commercial roofing and insulation - Management acknowledged pent-up demand for renovations in the construction sector and noted that lower interest rates could stimulate activity [25][26] Question: Margin recovery expectations in polymers - Management indicated that while margins are currently down, they expect improvements as demand recovers [28] Question: Future asset optimization actions - Management committed to a balanced approach between top-line growth and asset rationalization, with potential future announcements regarding asset sales [30]

Stepan Co. (SCL) came out with quarterly earnings of $0.48 per share, beating the Zacks Consensus Estimate of $0.36 per share. This compares to earnings of $1.03 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of +33.33%. A quarter ago, it was expected that this specialty chemicals company would post earnings of $0.92 per share when it actually produced earnings of $0.52, delivering a surprise of -43.48%.Over the last four quarte ...

October 29, 2025 Third Quarter 2025 Earnings Results Safe Harbor Certain information in this presentation 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 (the Exchange Act). These statements include statements about Stepan Company's plans, objectives, strategies, financial performance and outlook, trends, the amount and t ...

Core Points - Stepan Company has approved a quarterly cash dividend increase of $0.01 per share, representing a 2.6% rise, bringing the total dividend to $0.395 per share, payable on December 15, 2025 [1] - This increase marks the 58th consecutive year of dividend growth for the company [1] Company Overview - Stepan Company is a major manufacturer of specialty and intermediate chemicals, primarily producing surfactants used in cleaning, disinfection, and agricultural solutions [2] - The company is also a leading supplier of polyurethane polyols for the thermal insulation market and CASE (Coatings, Adhesives, Sealants, and Elastomers) industries [2] Operational Footprint - Headquartered in Northbrook, Illinois, Stepan operates modern production facilities across North and South America, Europe, and Asia [3] - The company's common stock is traded on the New York Stock Exchange under the symbol SCL [3]

Core Viewpoint - Stepan Company is set to release its third quarter 2025 earnings results on October 29, 2025, followed by a conference call to discuss financial and operational performance [1][2]. Company Overview - Stepan Company is a major manufacturer of specialty and intermediate chemicals, particularly known for its surfactants used in cleaning and disinfection products, as well as in agricultural and oilfield solutions [4]. - The company is also a leading supplier of polyurethane polyols for the thermal insulation market and CASE (Coatings, Adhesives, Sealants, and Elastomers) industries [4]. - Headquartered in Northbrook, Illinois, Stepan operates modern production facilities across North and South America, Europe, and Asia [5]. Conference Call Details - The conference call will be hosted by Luis E. Rojo, President and CEO, and Ruben D. Velasquez, Vice President and CFO [2]. - Participants can access the call via phone or webcast, with a recommendation to join ten minutes early to avoid delays [3].

Core Insights - The article discusses the best dividend stocks for a dividend champions list, focusing on companies that have consistently increased their dividends for 25 years or more [2][5]. Dividend Champions Overview - Dividend champions are distinguished from dividend aristocrats by not needing to be part of the S&P Index, but they share a commitment to increasing dividend payouts [2]. - The ability to grow dividends through challenging times, such as the pandemic, highlights the resilience of these companies [3]. Market Trends - There is a growing interest in dividend stocks among younger investors, particularly Gen Z, who are seeking financial independence and early retirement [4]. - Income-focused ETFs have gained significant traction, capturing about one in every six dollars flowing into equity ETFs, with the sector reaching approximately $750 billion by 2025 [5]. Methodology for Stock Selection - The selection process involved analyzing over 150 dividend champions and identifying those with the highest dividend yields as of October 2 [7]. Company Highlights - **The York Water Company (NASDAQ:YORW)**: - Offers a dividend yield of 2.91% and has paid dividends since 1816, increasing payouts for 28 consecutive years [9][12]. - Operates in a monopoly-like environment, providing stable cash flow due to the high costs of establishing utility services [11]. - **The Southern Company (NYSE:SO)**: - Provides a dividend yield of 3.15% and has a strong reputation in nuclear energy, overseeing eight reactors [13][15]. - Has a record of 24 years of consecutive dividend increases and has paid dividends without interruption for 78 years [15]. - **Stepan Company (NYSE:SCL)**: - Offers a dividend yield of 3.16% and has increased its dividend for 57 straight years [16][19]. - Reported an 8% increase in adjusted EBITDA to $51.4 million in the second quarter, with strong growth in its Polymers and NCT product lines [17][18].

Summary of Stepping Company Conference Call Company Overview - Stepping Company is listed on the New York Stock Exchange under the symbol SCL [2] - The company focuses on priority growth markets with strategic tailwinds for growth and emphasizes customer-centric operations [3] Key Business Segments - The company operates in three reporting segments: Surfactants, Polymers, and Specialty Products [6] - Surfactants serve six key end markets: agricultural chemicals, oil field chemicals, construction and industrial applications, personal care products, household cleaning, and laundry [6] - The Polymers segment primarily focuses on rigid polyols for insulation products [7] - Specialty Products cater to niche markets such as beverages and baby formula [7] Growth Drivers - Demand for food is projected to grow significantly, driving agricultural chemicals [8] - Oilfield chemicals are expected to see growth due to increased productivity and energy efficiency [9] - Long-term government investments in infrastructure are anticipated to boost the construction and industrial solutions segment [9] - The shift towards natural ingredients in personal care products is a key market driver [10] Financial Performance and Investments - The company has made significant investments, including the largest capital investment in its history with a new coxylation facility in Pasadena, Texas [4][12] - Recent growth in agricultural and oilfield surfactants has been noted, with double-digit growth in the first half of the year [19] - The company aims to focus on high-margin, high-growth end markets to drive EBITDA and free cash flow [10] Customer Base Expansion - Stepping Company added approximately 1,800 new customers in the last year, indicating a strong trend in customer acquisition [15][29] - The company has a potential market of 22,000 new and existing customers for further sales opportunities [15] - The focus is on expanding into Tier two and Tier three customer bases, which are smaller accounts that can grow over time [31] Management and Strategy - The management team has undergone changes, with a new CEO appointed in October and a new CFO recently [27][43] - Executive compensation is aligned with strategic targets such as net income, EBITDA, and free cash flow growth [26] - The company is committed to returning cash to shareholders, having increased dividends for 57 consecutive years [23][39] Challenges and Market Conditions - Sales have been trending downwards over the past five years, influenced by raw material cost fluctuations and weakness in agricultural sales [17][18] - The company is focused on managing its balance sheet, currently at a net leverage of 2.9, with plans to deleverage further [25] Innovation and R&D - Stepping Company employs over 230 chemists and has 14 application centers globally, introducing 33 new products in 2024, which accounts for about 10% of revenue [12][42] - The company emphasizes customer-centric innovation, providing tailored solutions and technical support to clients [13] Conclusion - Stepping Company is positioned for growth through strategic investments, a focus on high-margin markets, and an expanding customer base, while navigating challenges in sales trends and market conditions [10][19]