Financial Data and Key Metrics Changes - Adjusted third quarter net income was $36.4 million, flat compared to the prior year, with year-to-date adjusted net income at $121 million or $5.20 per diluted share, up 22% versus the first nine months of 2020 [5][9][10] - The effective tax rate for the first nine months of 2021 was 20%, down from 24% in the same period last year, primarily due to a favorable tax benefit recognized in Q3 2021 [10] Business Segment Data and Key Metrics Changes - Surfactants segment net sales were $388 million, a 16% increase year-over-year, with selling prices up 20% but volume down 6% due to lower consumer demand [11][12] - Polymer segment net sales were $199 million, up 70% from the prior year, with selling prices increasing 44% and volume growing 27%, largely driven by the INVISTA acquisition [13][15] - Specialty Products net sales increased by 15%, with operating income rising 53% due to order timing differences and improved margins [15] Market Data and Key Metrics Changes - Global supply chain disruptions and raw material price inflation negatively impacted all business segments, with estimated supply chain disruption costs of approximately $7 million in Q3 [6][12][54] - Institutional cleaning and disinfection volumes are growing as economies reopen, while consumer product demand is stabilizing but lower than peak pandemic levels [18][64] Company Strategy and Development Direction - The company is focusing on diversifying into functional markets, with double-digit growth in global agricultural volume and strong demand in oilfield products due to higher oil prices [19][23] - A $220 million investment is planned for a new alkoxylation production facility in Pasadena, Texas, aimed at meeting long-term growth expectations in both Surfactant and Polymer businesses [20][30] - The company aims to improve operational productivity and product mix to enhance Surfactant operating income and margins [19][21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future opportunities despite ongoing supply chain challenges, with expectations for gradual improvement in raw material availability [36][47] - The company anticipates growth in the Polymer business due to recovery from pandemic-related delays and the successful integration of the INVISTA acquisition [25][67] Other Important Information - The Board declared a quarterly cash dividend of $0.335 per share, marking a 9.8% increase, and authorized a $150 million stock repurchase program [7] - The company executed a $50 million private placement note at a fixed interest rate of around 2% to fund growth opportunities [16][43] Q&A Session Summary Question: Can you walk through the decision to invest in the Texas capacity? - The investment of $220 million at the Pasadena site is to meet long-term growth expectations in Surfactant and Polymer businesses, leveraging existing infrastructure [30] Question: Is the new facility replacing old assets or restarting idled assets? - The existing assets at the site were dismantled to make way for new alkoxylation capabilities, utilizing existing storage and logistics infrastructure [31] Question: What is the expected impact of raw material costs on margins? - Additional inflation is expected in Q4, but the slope of inflation is believed to be reducing, with plans to recover margins gradually through price increases [34] Question: How is the institutional growth demand characterized? - Institutional demand is real and driven by the reopening of economies, while consumer demand is more complex due to potential destocking [64] Question: What is the outlook for the Polymer business regarding isocyanate shortages? - There is pent-up demand in the polyol customer base, and supply chain issues are expected to improve, leading to growth in 2022 [67]

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2021 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (MARK ONE) ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File Number 1-4462 STEPAN COMPANY (Exact name of registrant as specified in its charter) (State or other jurisdiction (I.R.S. Employer of incorporat ...

Stepan S | --- | --- | --- | --- | --- | |-----------------------------------|-------|-------|-------|-------| | | | | | | | | | | | | | | | | | | | Earnings Call | | | | | | Presentation | | | | | | | | | | | | Second Quarter 2021 July 28, 2021 | | | | | | | | | | | | | | | | | | | | | | | Cautionary Statement 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, ...

Financial Data and Key Metrics Changes - Adjusted net income for Q2 2021 was $42.2 million or $1.81 per diluted share, a 10% increase from $38.3 million or $1.65 per diluted share in Q2 2020 [12][18] - Adjusted net income for the first half of 2021 was $84.6 million or $3.62 per diluted share, up 35% compared to the first half of 2020 [7][10] - The effective tax rate for the first half of 2021 was 24.4%, up from 23.9% in the prior year, primarily due to a less favorable geographical mix of income [17] Business Line Data and Key Metrics Changes - Surfactant segment net sales were $384 million, a 16% increase year-over-year, with selling prices up 17% but volume decreased 6% [18][20] - Polymer segment net sales were $191 million, up 70% from the prior year, with sales volume increasing 44% [21][22] - Specialty Products net sales were $21 million, a 33% increase from the prior year, with operating income up 116% [24] Market Data and Key Metrics Changes - North American surfactant volumes decreased due to lower demand for consumer cleaning products compared to pandemic peaks [19][41] - Latin America benefitted from a $2.1 million VAT tax recovery project, while Europe saw slight decreases in consumer product demand [20] - Agricultural volumes increased due to higher commodity prices, with corn and soybean prices doubling from the previous year [93] Company Strategy and Development Direction - The company is focusing on increasing capacity in product lines such as biocides and amphoterics to meet higher customer demand [32] - A strategic priority includes enhancing the product portfolio through acquisitions, with a focus on North America [39][70] - The company plans to continue investing in capacity improvements and productivity enhancements, particularly in the polymer business [36][92] Management's Comments on Operating Environment and Future Outlook - Management noted that while consumer demand for cleaning products has decreased from pandemic peaks, institutional cleaning volumes are expected to grow [30][41] - The company anticipates continued demand growth in agricultural and oilfield markets due to rising commodity prices [31][42] - Management expressed cautious optimism for the remainder of the year despite ongoing raw material price increases and maintenance costs [44] Other Important Information - The company declared a quarterly cash dividend of $0.305 per share, marking 53 consecutive years of dividend increases [10] - The company executed agreements for $100 million of new private placement debt at a fixed interest rate of around 2% [26] Q&A Session Summary Question: Pricing and raw material cost dynamics in surfactants and polymers - Management indicated that price increases implemented on July 1 are progressing well in surfactants, while more work is needed in polymers to restore margins [47][48] Question: Consumer surfactant demand compared to pre-pandemic levels - Management noted that while business is up versus pre-pandemic levels, it remains below peak levels from last year [50][52] Question: Impact of supply chain issues on construction activity - Management acknowledged supply shortages, particularly in MDI, affecting demand but remains optimistic about future growth [56][57] Question: Underlying earnings growth comparison - Management clarified that adjusted net income growth of 35% translates to approximately 12% growth on an apples-to-apples basis when excluding prior year impacts [61][62] Question: Revenue impact from raw material and logistics shortages - Management stated that shortages primarily impacted ethylene oxide and propylene oxide derivative businesses, estimating a couple of million dollars below expected operating income [66] Question: M&A strategy and pipeline - Management confirmed ongoing interest in acquisitions, particularly in enhancing the product portfolio, with a focus on North America [69][70] Question: CapEx expansion and its continuation into 2022 - Management confirmed that the low 1,4-dioxane project will continue into 2022, contributing to higher CapEx this year [75] Question: Customer feedback on price increases - Management indicated that customers are generally accepting of price increases due to widespread inflation across the industry [78][81] Question: Agricultural business growth drivers - Management attributed growth in agricultural volumes to rising commodity prices and successful product initiatives [93] Question: KMCO business relaunch timing and revenue potential - Management noted delays in relaunching the KMCO business due to R&D and supply chain challenges, with no incremental revenue expected in 2021 [95]

[Part I - Financial Information](index=2&type=section&id=Part%20I%20FINANCIAL%20INFORMATION) [Item 1 - Financial Statements](index=2&type=section&id=Item%201%20-%20Financial%20Statements) Unaudited Q1 2021 consolidated financial statements detail significant revenue and net income growth, asset increases from acquisitions, and a net cash decrease from investment activities [Condensed Consolidated Statements of Income](index=2&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20INCOME) Q1 2021 Net Sales increased 19.5% to $537.7 million, Net Income Attributable to Stepan Company rose 47.4% to $40.6 million, and Diluted EPS grew to $1.74 Q1 2021 vs Q1 2020 Income Statement Highlights | Metric | Three Months Ended March 31, 2021 (Millions) | Three Months Ended March 31, 2020 (Millions) | Change (%) | | :--- | :--- | :--- | :--- | | **Net Sales** | $537.7 | $450.0 | 19.5% | | **Gross Profit** | $109.0 | $79.3 | 37.5% | | **Operating Income** | $53.9 | $40.0 | 34.8% | | **Net Income Attributable to Stepan Company** | $40.6 | $27.5 | 47.4% | | **Diluted EPS** | $1.74 | $1.18 | 47.5% | [Condensed Consolidated Balance Sheets](index=4&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) Total assets increased to $1.83 billion as of March 31, 2021, primarily due to acquisitions, while cash and cash equivalents decreased to $150.7 million from acquisition-related cash usage Balance Sheet Highlights | Metric | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Cash and cash equivalents (Millions)** | $150.7 | $349.9 | | **Total current assets (Millions)** | $797.7 | $905.7 | | **Goodwill, net (Millions)** | $96.3 | $28.0 | | **Total assets (Billions)** | $1.83 | $1.75 | | **Total current liabilities (Millions)** | $464.1 | $416.6 | | **Total liabilities (Millions)** | $824.0 | $764.0 | | **Total equity (Billions)** | $1.00 | $0.99 | [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Q1 2021 cash flows show a net use of $11.7 million from operations, $223.8 million used in investing (mainly acquisitions), and $39.9 million provided by financing, leading to a $199.2 million net cash decrease Q1 2021 vs Q1 2020 Cash Flow Summary | Metric | Three Months Ended March 31, 2021 (Millions) | Three Months Ended March 31, 2020 (Millions) | | :--- | :--- | :--- | | **Net Cash Used In Operating Activities** | ($11.7) | ($6.5) | | **Net Cash Used In Investing Activities** | ($223.8) | ($32.9) | | **Net Cash (Used In) Provided By Financing Activities** | $39.9 | ($14.4) | | **Net Decrease in Cash and Cash Equivalents** | ($199.2) | ($61.0) | [Notes to Condensed Consolidated Financial Statements](index=6&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail key financial events, including 2021 acquisitions of INVISTA's polyester polyol business for $165 million and a fermentation plant for $3.5 million, strong segment performance, and increased debt to $248.4 million - On January 29, 2021, the company acquired INVISTA's aromatic polyester polyol business for a purchase price of **$165 million**, plus working capital, including **two manufacturing sites** and expanding capabilities in the **U.S. and Europe**[69](index=69&type=chunk) - On February 2, 2021, the company acquired a **fermentation plant** in Lake Providence, Louisiana for **$3.5 million** to support its **bio-surfactant technology platform**[73](index=73&type=chunk) Q1 2021 Segment Performance | Segment | Net Sales (Millions) | Operating Income (Millions) | | :--- | :--- | :--- | | **Surfactants** | $370.9 | $53.2 | | **Polymers** | $150.4 | $18.0 | | **Specialty Products** | $16.4 | $2.6 | - Total debt increased to **$248.4 million** as of March 31, 2021, up from **$198.7 million** at year-end 2020, primarily due to borrowings under the revolving credit facility, with **$298.2 million** available under its **$350 million revolving credit agreement**[63](index=63&type=chunk)[130](index=130&type=chunk)[131](index=131&type=chunk) [Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=21&type=section&id=Item%202%20-%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses strong Q1 performance, with net income up 47% driven by segment growth, attributing it to market recovery and acquisitions, while affirming sufficient liquidity despite cash used for investments [Overview](index=22&type=section&id=Overview) The company operates in Surfactants (69% of Q1 2021 sales), Polymers (28%), and Specialty Products (3%), with recent acquisitions expanding Polymers and advancing Surfactants' bio-surfactant capabilities - The **Surfactants segment** produces ingredients for **consumer and industrial cleaning and disinfection products**[83](index=83&type=chunk) - The **Polymers segment** includes **polyurethane polyols** for **thermal insulation** and **specialty polyols** for **coatings, adhesives, sealants, and elastomers (CASE)**[88](index=88&type=chunk) - In January 2021, the company acquired **INVISTA's aromatic polyester polyol business**, including **two manufacturing sites**, expanding its capabilities in the **U.S. and Europe**[86](index=86&type=chunk)[88](index=88&type=chunk) - In February 2021, the company acquired a **fermentation plant** in Louisiana to complement its **rhamnolipid-based bio-surfactant technology** acquired in 2020[84](index=84&type=chunk)[87](index=87&type=chunk) [Results of Operations](index=25&type=section&id=RESULTS%20OF%20OPERATIONS) Q1 2021 net income increased 47% to $40.6 million, with consolidated net sales up 20% to $537.7 million, driven by higher prices and volume, while Polymer sales volume surged 32% and Surfactant sales volume remained flat due to regional variations Q1 2021 vs Q1 2020 Performance Summary | Metric | Q1 2021 (Millions) | Q1 2020 (Millions) | Change (%) | | :--- | :--- | :--- | :--- | | **Net Income Attributable to Company** | $40.6 | $27.5 | 47% | | **Adjusted Net Income (Non-GAAP)** | $42.4 | $24.2 | 75% | | **Consolidated Net Sales** | $537.7 | $450.0 | 20% | - Polymer segment sales volume increased **32%**, reflecting **recovery from COVID-19 project delays**, the **INVISTA acquisition**, and **non-recurrence of a 2020 plant outage**[92](index=92&type=chunk)[108](index=108&type=chunk) - Surfactant segment sales volume was **flat**, with **higher volumes in Europe, Latin America, and Asia** offset by **lower North American volume** due to **supply chain disruptions** from **severe weather in Texas**[92](index=92&type=chunk)[99](index=99&type=chunk) - Specialty Products operating income **decreased by $1.4 million** due to **lower unit margins** from **raw material shortages** and **manufacturing challenges**[116](index=116&type=chunk) [Liquidity and Capital Resources](index=30&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) Q1 2021 cash and cash equivalents decreased by $199.2 million to $150.7 million, mainly due to $223.8 million in investing activities, including the $184.0 million INVISTA acquisition, but liquidity remains sufficient with $298.2 million available credit Q1 2021 Cash Flow Summary | Metric | Q1 2021 (Millions) | | :--- | :--- | | **Cash Used In Operating Activities** | ($11.7) | | **Cash Used In Investing Activities** | ($223.8) | | **Cash Provided By Financing Activities** | $39.9 | | **Net Decrease in Cash** | ($199.2) | - The primary use of cash in investing activities was the **$184.0 million** (net of cash received) for the **INVISTA business acquisition**[124](index=124&type=chunk) - The company estimates total capital expenditures for 2021 will range from **$150 million to $170 million**[125](index=125&type=chunk) - As of March 31, 2021, the company had **$298.2 million** available under its **$350 million revolving credit facility**[131](index=131&type=chunk) [Outlook](index=33&type=section&id=OUTLOOK) Management expects Surfactant volumes to recover and global demand for cleaning products to remain strong, while the Polymer segment is poised for growth from construction recovery and the INVISTA acquisition, with attractive long-term prospects driven by energy conservation and building codes - Management believes Surfactant volumes in North American consumer markets will **recover** from **Q1 supply chain disruptions**[140](index=140&type=chunk) - The Polymer segment is expected to **deliver growth**, benefiting from the **recovery of construction projects** and the **INVISTA acquisition**[140](index=140&type=chunk) - Long-term prospects for Polymers are viewed as **attractive**, supported by trends in **energy conservation** and **building codes**[140](index=140&type=chunk) [Item 4 – Controls and Procedures](index=35&type=section&id=Item%204%20%E2%80%93%20Controls%20and%20Procedures) As of March 31, 2021, the CEO and CFO concluded that disclosure controls and procedures were effective, with no material changes to internal control over financial reporting during the quarter - Management, including the CEO and CFO, evaluated disclosure controls and procedures and found them to be **effective** as of **March 31, 2021**[151](index=151&type=chunk) - **No changes** occurred during the quarter that **materially affected**, or are reasonably likely to materially affect, the company's **internal control over financial reporting**[151](index=151&type=chunk) [Part II - Other Information](index=35&type=section&id=Part%20II%20OTHER%20INFORMATION) [Item 1 & 1A – Legal Proceedings & Risk Factors](index=35&type=section&id=Item%201%20%E2%80%93%20Legal%20Proceedings%20%26%20Item%201A%20%E2%80%93%20Risk%20Factors) The company reports no material changes to legal proceedings or risk factors since its 2020 Annual Report on Form 10-K - There have been **no material changes** to **legal proceedings** since the 2020 Annual Report on Form 10-K[152](index=152&type=chunk) - There have been **no material changes** to **risk factors** since the 2020 Annual Report on Form 10-K[153](index=153&type=chunk) [Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds](index=35&type=section&id=Item%202%20%E2%80%93%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In Q1 2021, the company repurchased **30,116 shares** at an average price of **$120.52** per share, with **167,574 shares** remaining authorized under the repurchase program Q1 2021 Share Repurchases | Month | Total Shares Purchased | Average Price Paid per Share | Shares Purchased on Open Market | | :--- | :--- | :--- | :--- | | January 2021 | 381 | $129.03 | 0 | | February 2021 | 17,418 | $119.18 | 8,300 | | March 2021 | 12,317 | $122.16 | 0 | | **Total** | **30,116** | **$120.52** | **8,300** | - As of March 31, 2021, **167,574 shares** may yet be purchased under the company's **authorized share repurchase program**[128](index=128&type=chunk)[154](index=154&type=chunk)

Financial Data and Key Metrics Changes - The company reported record quarterly income with adjusted net income of $42.4 million, or $1.82 per diluted share, representing a 75% increase from $24.2 million, or $1.04 per diluted share in the same quarter last year [7][12] - The effective tax rate for the quarter was 23.6%, up from 22.5% in the prior year, primarily due to a less favorable geographical mix of income [16] Business Line Data and Key Metrics Changes - Surfactant operating income increased by 47%, driven by an improved customer and product mix, with net sales reaching $371 million, a 13% increase year-over-year [17][19] - Polymer business saw a 140% increase in operating income, with net sales of $150 million, up 41% from the prior year, and a 32% growth in global sales volume [21][23] - Specialty product business net sales remained at $16 million, with a slight decline in operating income due to lower margins in the MCT product line [24] Market Data and Key Metrics Changes - North America surfactant results improved due to a better product mix, while Brazil and Mexico also saw volume increases [20] - Global agricultural volumes increased significantly, with strong growth in the post-patent pesticide segment [36] Company Strategy and Development Direction - The company is focusing on increasing capacity in specific product lines, including biocides and amphoterics, to meet anticipated higher customer requirements [31] - The integration of the INVISTA acquisition is progressing well, with expectations of it being accretive to EPS and EBITDA margins in 2021 [39][102] - The company is committed to enhancing its digital customer engagement strategy and optimizing fermentation process technology for next-generation surfactants [91][40] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the continued strong demand for surfactants in consumer product markets due to changing consumer habits and heightened cleaning standards [30][68] - The company anticipates improvements in the Specialty Product business and expects to see benefits from productivity gains in the future [43][37] Other Important Information - The company declared a quarterly cash dividend of $0.305 per share, marking 53 consecutive years of dividend increases [9] - The total cash reduction from $350 million to $151 million was primarily due to the INVISTA acquisition [25] Q&A Session Summary Question: Polymer margins and seasonality - Management noted that polymer margins are down in 2021 due to significant raw material price increases, and they are implementing price increases to recover costs [48] Question: Surfactant margins and pricing initiatives - Management indicated that surfactant margins improved due to a better product mix and that they have already initiated price increases to address raw material inflation [53][54] Question: Fermentation business ramp-up - The company is in the R&D phase for fermentation technology and has staff trained in fermentation processes [56] Question: Capacity changes and sustainable demand - Management highlighted that they have increased capacity for amphoteric products and biocides, and they believe that enhanced cleaning standards will sustain demand [64][68] Question: Agricultural business outlook - The agricultural business is expected to see strong growth due to rising commodity prices and increased planting [76] Question: Integration of INVISTA - The integration of INVISTA is progressing well, with sufficient capacity to support market growth for the next decade [85] Question: Passing through higher raw material prices - Management stated that they are better positioned in surfactants to pass through price increases compared to polymers, where they are lagging [93]

Stepan S | --- | --- | --- | --- | --- | |--------------------|-------|-------|-------|-------| | | | | | | | | | | | | | | | | | | | | | | | | | Earnings Call | | | | | | | | | | | | Presentation | | | | | | First Quarter 2021 | | | | | | April 27, 2021 | | | | | | | | | | | | | | | | | | | | | | | Cautionary Statement 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 ...

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File Number 1-4462 STEPAN COMPANY (Exact name of registrant as specified in its charter) UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (MARK ONE) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | Delaware 36-1823834 | | --- | | (State or other jurisdicti ...

Stepan S | --- | --- | --- | --- | |-----------------------------|-------|-------|-------| | | | | | | | | | | | | | | | | | | | | | Earnings Call Presentation | | | | | | | | | | Fourth Quarter 2020 | | | | | February 18, 2021 | | | | Cautionary Statement 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 A ...

Financial Data and Key Metrics Changes - Fourth quarter adjusted net income was $33.1 million, or $1.42 per diluted share, up 29% from $25.7 million, or $1.10 per diluted share last year [6][12] - Full year adjusted net income reached a record $132 million, up 11% from the previous year [6][25] - The company's effective tax rate for 2020 was 25%, compared to 18% in 2019, primarily due to non-recurring tax savings in 2019 and a one-time tax cost in Q4 2020 [16] Business Line Data and Key Metrics Changes - Surfactant segment net sales were $358 million, a 16% increase year-over-year, with sales volume up 8% driven by demand for cleaning and disinfection products [18][20] - Polymer segment net sales were $116.7 million, consistent with the prior year, but operating income increased 100% to $11.4 million due to an insurance recovery [22] - Specialty product net sales were $19.6 million, a 6% increase, with operating income improving by 2% [24] Market Data and Key Metrics Changes - North America saw strong demand in the consumer product end market, while Brazil achieved record quarterly results driven by volume growth [21] - European results increased slightly due to higher consumer product demand, while Mexico's results were lower due to a high base period from the previous year [21] Company Strategy and Development Direction - The company is focusing on increasing capacity in biocides and amphoterics to meet higher customer requirements [31] - A significant acquisition of INVISTA's aromatic polyester polyol business was completed, expected to enhance market growth and improve margins [36][37] - The company is also investing in a fermentation plant to produce biosurfactants, aligning with sustainability trends [39][40] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued strong demand in the surfactant market due to changing consumer habits [48] - The company anticipates that the specialty product business will improve slightly year-over-year [42] - Management noted challenges in the oilfield and polymer segments but remains optimistic about long-term prospects due to energy conservation efforts [34][41] Other Important Information - The company declared a quarterly cash dividend of $0.305 per share, marking 53 consecutive years of higher dividends [9] - The balance sheet remains strong with a cash balance of $350 million exceeding total debt of $199 million [28] Q&A Session Summary Question: What were the main drivers of the strong surfactant sales performance in Q4? - Management attributed the growth to sustained demand for disinfection and hand wash products, driven by changing consumer habits [48] Question: How should we think about the ramp-up in dollar sales for Tier 2 and Tier 3 accounts? - Management believes there is significant opportunity to expand product offerings to Tier 2 and Tier 3 customers, with a focus on increasing penetration [51][54] Question: What is the expected EBITDA contribution from the INVISTA acquisition? - Management indicated that while the first year will involve transition costs, the acquisition is expected to be accretive to EPS and deliver significant EBITDA contributions in the following years [63] Question: What are the key projects involved in the elevated CapEx for 2021? - Key projects include investments in 1,4-Dioxane capacity, specialty surfactants, and infrastructure improvements to reduce emissions [65][66] Question: How is the company managing raw material inflation and pricing dynamics? - Management noted that they are experiencing raw material price increases but are implementing price increases to maintain margins [70]