NORTHBROOK, Ill.,Dec. 3, 2025/PRNewswire/ -- Stepan Company (NYSE:[](#financial-modal)**[SCL](https://edge.prnewswire.com/c/link/?t=0&l=en&o=4571307-1&h=3072755143&u=https://www.prnewswire.com/news-releases/stepan-announces-acquisition-of-aromatic-polyester-polyol-business-from-invista-301218379.html#financial-modal&a=SCL)**) today announced that it has entered into an agreement to sell its manufacturing assets located in Lake Providence, LA to an undisclosed buyer.This transaction follows Stepan's most rec ...

Core Insights - SouthernSun Asset Management's "SouthernSun Small Cap Strategy" reported an 11.73% gross return in Q3 2025, underperforming the Russell 2000 Index and Russell 2000 Value Index which returned 12.39% and 12.60% respectively [1] - Over the trailing twelve months, the strategy returned -0.66% gross, significantly lower than the indexes which returned 10.76% and 7.88% [1] Company Performance - Stepan Company (NYSE:SCL) was highlighted as a detractor in the Small Cap strategy, with a one-month return of -11.30% and a 52-week loss of 47.82% [2][3] - As of November 4, 2025, Stepan Company's stock closed at $42.31, with a market capitalization of $956.902 million [2] - The company is focusing on growing its functional surfactants for agriculture and oilfield markets, but faced a 1% decline in overall surfactant segment volumes due to weakness in commodity consumer product markets [3] - The Polymer segment saw a 7% increase in volumes, driven by strong demand in North American and European rigid polyols markets [3] - Stepan Company generated $197 million in trailing 12-month EBITDA, with expectations to reach $60 million quarterly as market conditions improve [3] - The company ended the second quarter with a net debt to trailing 12-month EBITDA ratio of 2.9x, which is expected to decrease as heavy investments conclude [3] - Luis Rojo, promoted to CEO in October 2024, has been recognized for effectively executing the business strategy [3] - Stepan Company is acknowledged as an industry leader in developing new products and maintaining long-term customer relationships, which are anticipated to provide steady cash flow [3]

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 at the Pasadena facility [4][6] - Third quarter adjusted net income was $10.9 million, a 54% decrease from $23.7 million in the prior year, primarily due to a higher effective tax rate and increased depreciation [6][8] - Free cash flow was positive at $40 million for the quarter, driven by reduced working capital and disciplined capital spending [7][15] Business Line Data and Key Metrics Changes - Specialty Products adjusted EBITDA increased significantly by 113%, driven by favorable order timing in the pharmaceutical business [5][14] - Polymers net sales decreased by 4% to $143.9 million, with selling prices down 14% but volume increased by 8% [12][14] - Surfactants adjusted EBITDA decreased by 14% to $37.5 million, impacted by higher startup costs and raw material price inflation [11][12] Market Data and Key Metrics Changes - North America rigid polyol and commodity PA volumes grew by double digits, while European volumes were affected by macroeconomic uncertainties [6][12] - Surfactants experienced a 10% increase in net sales, but volume declined by 2% due to lower demand in global commodity consumer products [11][12] Company Strategy and Development Direction - The company remains focused on balancing volume and margins, with a commitment to not lose market share while managing costs [16][24] - The Pasadena facility is fully operational and expected to contribute fully by 2026, enhancing production capabilities [17][18] - The company is analyzing opportunities to optimize its global footprint and asset base, including the sale of its site in the Philippines [19][32] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about recovering margins in the surfactants business, with a target to achieve margin recovery by 2026 [23][26] - The company anticipates continued growth in key strategic end markets, particularly in crop productivity and oil field businesses [16][18] - Despite current market uncertainties, management remains optimistic about achieving full-year adjusted EBITDA growth and positive free cash flow in 2025 [19] Other Important Information - The company declared a quarterly cash dividend of $0.395 per share, marking a 2.6% increase, continuing a 58-year trend of increasing dividends [7] Q&A Session Summary Question: Recovery of oil chemicals cost in surfactants - Management noted that coconut oil prices have increased significantly but are now coming down, with a goal to recover margins by 2026 [23] Question: Pricing challenges with lower raw material costs - Management emphasized the importance of balancing volumes and margins, stating they will remain competitive in the market [24] Question: Long-term margin goals for surfactants - Management believes that double-digit EBITDA margins are achievable as they grow in functional markets [26] Question: Pent-up demand in commercial roofing and insulation - Management confirmed there is pent-up demand for renovation in the construction sector, which could improve with lower interest rates [28] Question: Margin recovery in polymers - Management indicated that while margins are currently under pressure, they expect improvements as demand recovers [30] Question: Optimization of global footprint - Management committed to a balanced approach between productivity, asset rationalization, and top-line growth, with future announcements expected [32]

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]

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]

Summary of Ascent Industries Conference Call Company Overview - **Company Name**: Ascent Industries - **Ticker Symbol**: ACNT (NASDAQ) - **Industry**: Specialty Chemicals - **Historical Context**: The company has undergone significant transformation since early 2024, with leadership experienced in turnaround situations from previous roles at ClearOn, a specialty chemical manufacturer that improved from a loss of $8 million in adjusted EBITDA to $36 million over four years [3][4]. Key Points and Arguments Financial Performance - **Turnaround Achievements**: In the past year, Ascent Industries achieved a turnaround of approximately $19.9 million in adjusted EBITDA and $20 million in gross margin improvements, alongside generating $70 million in cash [6]. - **Divestitures**: The company divested its stainless steel assets, including Bristol Metals for $45 million and ASTI for $17 million, transitioning to a pure play specialty chemical company [7]. - **Current Financials**: The company reported a cash drag of $2.1 million from an idle facility, which is expected to be resolved by year-end [8]. Business Strategy - **Chemicals as a Service**: Ascent focuses on providing customized chemical solutions rather than traditional manufacturing, with a shift from 90% custom manufacturing to 75% product sales [10][11]. - **Market Segments**: The company targets four key segments: hygiene and industrial cleaning, oil and gas, water treatment, and coatings, adhesives, sealants, and elastomers [10][15]. - **Growth Potential**: The U.S. specialty chemical market is valued at $200 billion, with Ascent's addressable market at $300 million, indicating significant growth potential [16][17]. Operational Efficiency - **Utilization Rates**: Current asset utilization is around 50%, presenting opportunities for growth with minimal capital investment [12][18]. - **Cost Management**: The company has focused on reducing costs and improving margins, with a target of achieving a 35% gross margin and 15% adjusted EBITDA by 2030 [26][27]. Future Growth Plans - **Revenue Goals**: Ascent aims to reach $120 million to $130 million in revenue from existing assets by 2030, with a long-term goal of $500 million [61][62]. - **M&A Strategy**: The company is exploring small acquisitions to enhance its capabilities and address organic growth challenges, focusing on orphan products and complementary capabilities [30][31]. Market Position and Brand Recognition - **Rebranding Efforts**: Ascent has undergone a rebranding to improve market perception, moving away from a reputation of custom manufacturing to being recognized for innovative solutions [42][45]. - **Sales Strategy**: The company has revamped its sales organization and marketing efforts, resulting in a 45% improvement in the selling project pipeline [24][60]. Additional Important Insights - **R&D Focus**: Ascent is enhancing its R&D capabilities to develop custom solutions and improve product offerings [55]. - **Share Buyback**: The company has been active in share buybacks, utilizing proceeds from asset sales to strengthen its balance sheet [34]. - **Investor Confidence**: Leadership expresses confidence in the company's undervalued status and future growth potential, emphasizing disciplined capital management [39][40]. This summary encapsulates the key points discussed during the conference call, highlighting Ascent Industries' strategic direction, financial performance, and growth opportunities within the specialty chemicals sector.

Core Viewpoint - Stepan Company (SCL) is currently rated as a Zacks Rank 5 (Strong Sell) due to a recent earnings miss and subsequent stock sell-off [1]. Company Overview - Stepan Company is a significant manufacturer of specialty and intermediate chemicals utilized across various industries, particularly known for producing surfactants, which are essential in consumer and industrial cleaning products [2]. Earnings History - The company has beaten the Zacks Consensus Estimate in two of the last four quarters but has also missed in two quarters, indicating mixed performance [4]. - In the most recent quarter, Stepan reported an EPS of $0.52, falling short of the consensus estimate of $0.92, resulting in a negative earnings surprise of 43.5% [5]. Earnings Estimates - Recent trends show a decline in earnings estimates for Stepan, with the current fiscal year consensus remaining at $3.33, while the next year's estimate has decreased from $4.43 to $4.01 over the past 60 days [6]. - The negative movement in earnings estimates is a key factor contributing to the stock's Zacks Rank of 5 (Strong Sell) [6]. Market Context - Many stocks within the Zacks universe are experiencing negative earnings estimate revisions, leading to a broader trend of stocks falling to a Zacks Rank 5 (Strong Sell) [7].