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3 chemical stocks to play the industry breakoutStepan NYSE: SCL is in the early stages of a margin recovery, supported by growth in higher-margin product areas, cost reductions and broader-based volume gains, Chief Financial Officer Ruben Velasquez said during a company presentation.

Velasquez said second-quarter EBITDA increased 45% year over year, while organic volume rose 6%. He described the volume performance as broad-based across geographies and most of the company’s priority growth segments rather than the result of activity from a single customer.

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The specialty and intermediate chemicals company operates through Surfactants, Polymers and Specialty Products. Surfactants account for about 70% of sales but approximately 60% of EBITDA, according to Velasquez. Specialty Products represent a smaller sales contribution but a comparatively larger portion of EBITDA.

Strategy Focuses on Higher-Margin Markets Velasquez said Stepan’s strategy centers on customer-focused innovation, diversification into faster-growing and higher-margin applications, operational excellence and disciplined capital allocation.

The company is seeking to expand in what it calls priority segments, including crop productivity, oilfield solutions, rigid polyols used in insulation panels, and smaller tier 2 and tier 3 customers that require more tailored technical support. Velasquez said roughly 75% of Stepan’s EBITDA now comes from these priority segments.

While legacy consumer customers remain important to plant utilization and sales volumes, the company is aiming for a more balanced customer mix. Velasquez said the company does not plan to divest lower-margin legacy consumer business, citing longstanding relationships with large consumer-product companies and continued innovation opportunities with those customers.

Stepan employs about 230 scientists globally and operates 14 application centers, Velasquez said. The company launched 41 products last year, and new products account for roughly 10% of annual sales.

Oilfield and Insulation Opportunities Priority segments, including oil and gas, posted high-single-digit growth in the second quarter, Velasquez said. He attributed demand in oilfield chemicals partly to producers’ interest in extracting more oil from existing reservoirs, particularly when oil prices are elevated.

Stepan’s surfactants can be used in secondary recovery applications, where chemicals are used with water or gas to help oil flow from reservoirs. Velasquez said the company is also working with smaller oil companies to develop surfactant formulations suited to specific fields. That development work can take several months, but he said resulting business tends to be more durable once a formulation is adopted.

In Polymers, Stepan is a market leader in polyiso insulation products for industrial buildings, while its rigid and spray-foam activities are growing from a smaller base. Velasquez said the rigid and spray-foam business, which serves residential applications, grew threefold in the second quarter. He cited energy conservation and insulation needs as long-term drivers, while acknowledging that construction conditions remain soft in some markets.

Project Catalyst Targets $100 Million in Savings Stepan’s Project Catalyst cost-reduction initiative is intended to generate $100 million in savings over two years, with 60% expected in 2026 and 40% in 2027. The program includes footprint optimization, operational efficiencies and organizational changes.

As part of the effort, Stepan completed the closure of a legacy site in New Jersey at the end of the first quarter, closed certain units at facilities in Illinois and the U.K., and announced a reduction of 100 roles. The company is moving some production to more efficient plants, including its alkoxylation facility in Pasadena, Texas.

Velasquez said Pasadena is expected to reach average utilization of 80% by year-end as Stepan shifts volume from less-efficient plants and brings certain previously outsourced production in-house. He said the company had already realized $18 million to $20 million of the initiative’s expected $25 million quarterly run-rate improvement in the second quarter.

He cautioned that the full $100 million of Catalyst savings will not all reach the bottom line, because some savings will offset inflation and some will be reinvested in growth areas.

Cash Generation and Balance Sheet Remain Priorities Velasquez said Stepan has reduced net leverage to about 2.5 times from roughly 3 times previously and intends to continue deleveraging while maintaining flexibility for future investments. Capital expenditures are expected to normalize in a range of $100 million to $110 million after a period of larger investments, including the Pasadena facility.

The company invested about $58 million in working capital during the second quarter, driven by higher receivables associated with organic volume growth and inventory purchases intended to secure material supply. Despite that investment, Velasquez said Stepan expects to finish the year with positive cash generation.

He also said the company estimates that customer pull-forward activity contributed approximately $5 million to $10 million of EBITDA in the second quarter. Even excluding that effect, he said, Stepan’s EBITDA and volume growth remained significant and broad-based.

About Stepan (NYSE:SCL)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].

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, /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

Three Months Ended
June 30,

Six Months Ended
June 30,

($ in thousands, except per share data)

2026

2025

%
Change

2026

2025

%
Change

Net Sales

$

684,109

$

594,689

15

%

$

1,288,618

$

1,187,944

8

%

Operating Income (Loss)

$

37,210

$

17,965

107

%

$

(12,412)

$

46,253

NM

Net Income (Loss)

$

22,911

$

11,341

102

%

$

(18,495)

$

31,052

NM

Earnings per Diluted Share

$

1.00

$

0.50

100

%

$

(0.81)

$

1.36

NM

Adjusted Net Income *

$

27,052

$

11,952

126

%

$

37,365

$

31,262

20

%

Adjusted Earnings per
   Diluted Share *

$

1.18

$

0.52

127

%

$

1.63

$

1.37

19

%

* See Table II for reconciliations of non-GAAP adjusted net income and adjusted earnings per diluted share.

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.  

Three Months Ended
June 30, 2026

Six Months Ended
June 30, 2026

Volume

3

%

(—)

%

Selling Price & Mix

9

%

5

%

Foreign Translation

3

%

3

%

Total

15

%

8

%

Segment Results

Three Months Ended
June 30,

Six Months Ended
June 30,

($ in thousands)

2026

2025

%
Change

2026

2025

%
Change

Net Sales

Surfactants

$

483,902

$

411,456

18

%

$

937,589

$

841,793

11

%

Polymers

$

178,007

$

162,751

9

%

$

308,036

$

308,867

(0)

%

Specialty Products

$

22,200

$

20,482

8

%

$

42,993

$

37,284

15

%

Total Net Sales

$

684,109

$

594,689

15

%

$

1,288,618

$

1,187,944

8

%

Three Months Ended
June 30,

Six Months Ended
June 30,

($ in thousands, all amounts pre-tax)

2026

2025

%
Change

2026

2025

%
Change

Operating Income (Loss)

Surfactants

$

34,362

$

13,367

157

%

$

52,910

$

42,297

25

%

Polymers

$

22,469

$

17,159

31

%

$

31,291

$

25,177

24

%

Specialty Products

$

5,007

$

5,258

(5)

%

$

9,722

$

10,766

(10)

%

Total Segment
   Operating Income

$

61,838

$

35,784

73

%

$

93,923

$

78,240

20

%

Corporate Expenses

$

(24,628)

$

(17,819)

38

%

$

(106,335)

$

(31,987)

232

%

Consolidated
   Operating Income
    (Loss)

$

37,210

$

17,965

107

%

$

(12,412)

$

46,253

NM

Three Months Ended
June 30,

Six Months Ended
June 30,

($ in millions)

2026

2025

%
Change

2026

2025

%
Change

EBITDA

$

69.1

$

50.6

37

%

$

52.7

$

108.6

(51)

%

Adjusted EBITDA

   Surfactants

$

54.9

$

34.5

59

%

$

96.0

$

82.9

16

%

   Polymers

$

31.2

$

25.6

22

%

$

48.6

$

41.6

17

%

   Specialty Products

$

6.5

$

6.7

(3)

%

$

12.6

$

13.7

(8)

%

   Unallocated Corporate

$

(18.1)

$

(15.4)

18

%

$

(33.1)

$

(29.3)

13

%

Consolidated Adjusted EBITDA

$

74.4

$

51.4

45

%

$

124.1

$

108.9

14

%

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

Table I

STEPAN COMPANY
For the Three and Six Months Ended June 30, 2026 and 2025
(Unaudited – in 000's, except per share data)

Three Months Ended
June 30,

Six Months Ended
June 30,

2026

2025

2026

2025

Net Sales

$

684,109

$

594,689

$

1,288,618

$

1,187,944

Cost of Sales

584,127

522,804

1,123,785

1,040,596

Gross Profit

99,982

71,885

164,833

147,348

Operating Expenses:

Selling

14,866

14,657

27,032

26,765

Administrative

24,203

22,801

45,516

44,215

Research, Development and Technical Services

17,195

14,701

32,188

29,350

Deferred Compensation

1,402

1,761

1,964

765

57,666

53,920

106,700

101,095

Business Restructuring

5,106

-

70,545

-

Operating Income (Loss)

37,210

17,965

(12,412)

46,253

Other Income (Expense):

Interest, Net

(5,682)

(5,485)

(10,693)

(9,611)

Other, Net

1,021

1,306

1,165

1,808

(4,661)

(4,179)

(9,528)

(7,803)

Income (Loss) Before Provision for Income
  Taxes

32,549

13,786

(21,940)

38,450

Provision for Income Taxes

9,638

2,445

(3,445)

7,398

Net Income (Loss)

22,911

11,341

(18,495)

31,052

Net Income (Loss) Per Common Share

Basic

$

1.00

$

0.50

$

(0.81)

$

1.36

Diluted

$

1.00

$

0.50

$

(0.81)

$

1.36

Shares Used to Compute Net Income Per
   Common Share

Basic

22,897

22,865

22,893

22,866

Diluted

22,924

22,879

22,893

22,885

Table II

Reconciliation of Non-GAAP Net Income (Loss) and Earnings per Diluted Share*

Three Months Ended
June 30,

Six Months Ended
June 30,

($ in thousands, except per share amounts)

2026

EPS

2025

EPS

2026

EPS

2025

EPS

Net Income (Loss) Reported

$

22,911

$

1.00

$

11,341

$

0.50

$

(18,495)

$

(0.81)

$

31,052

$

1.36

Deferred Compensation (Income)
    Expense

$

52

$

-

$

69

$

-

$

529

$

0.02

$

(401)

$

(0.02)

Environmental Remediation
    Expense

$

92

$

-

$

542

$

0.02

$

170

$

0.01

$

611

$

0.03

Business Restructuring

$

3,997

$

0.18

$

-

$

-

$

55,161

$

2.41

$

-

$

-

Adjusted Net Income

$

27,052

$

1.18

$

11,952

$

0.52

$

37,365

$

1.63

$

31,262

$

1.37

* All amounts in this table are presented after-tax

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. Table III

Reconciliation of Pre-Tax to After-Tax Adjustments

Management uses the non-GAAP adjusted net income metric to evaluate the Company's operating performance. Management excludes the items listed in the table below because they are non-operational items. The cumulative tax effect is typically calculated using the statutory tax rates for the jurisdictions in which the transactions occurred.

Three Months Ended
June 30,

Six Months Ended
June 30,

($ in thousands, except per share amounts)

2026

EPS

2025

EPS

2026

EPS

2025

EPS

Pre-Tax Adjustments

Deferred Compensation (Income)
     Expense

$

68

$

92

$

696

$

(534)

Environmental Remediation
     Expense

$

121

$

722

$

223

$

814

Business Restructuring

$

5,106

$

-

$

70,545

$

-

   Total Pre-Tax Adjustments

$

5,295

$

814

$

71,464

$

280

Cumulative 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

Table IV

Deferred Compensation Plans

The full effect of the deferred compensation plans on quarterly pre-tax income was $0.1 million of expense versus $0.1 million of expense in the prior year.  The quarter-end market prices of Company stock and the impact of deferred compensation on specific income statement line items is summarized below:

2026

2025

6/30

3/31

12/31

9/30

6/30

3/31

Stepan Company

$

55.72

$

49.98

$

47.36

$

47.70

$

54.58

$

55.04

Three Months Ended
June 30,

Six Months Ended
June 30,

($ in thousands)

2026

2025

2026

2025

Deferred Compensation

Operating Income (Expense)

$

(1,402)

$

(1,761)

$

(1,964)

$

(765)

Other, net – Mutual Fund Gain

1,334

1,669

1,268

1,299

Total Pre-Tax

$

(68)

$

(92)

$

(696)

$

534

Total After-Tax

$

(52)

$

(69)

$

(529)

$

401

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. 

($ in millions)

Three Months
Ended
June 30,

Change

Change
Due to
Foreign
Currency
Translation

Six Months Ended
June 30,

Change

Change
Due to
Foreign
Currency
Translation

2026

2025

2026

2025

Net Sales

$

684.1

$

594.7

$

89.4

$

17.1

$

1,288.6

$

1,187.9

$

100.7

$

42.4

Gross Profit

100.0

71.9

$

28.1

2.9

164.8

147.3

$

17.5

5.4

Operating Income
    (Loss)

37.2

18.0

$

19.2

2.1

(12.4)

46.3

$

(58.7)

3.4

Pretax Income
    (Loss)

32.5

13.8

$

18.7

2.1

(21.9)

38.5

$

(60.4)

3.5

Corporate Expenses

Three Months Ended
June 30,

Six Months Ended
June 30,

($ in thousands)

2026

2025

%
Change

2026

2025

%
Change

Total Corporate Expenses

$

24,628

$

17,819

38

%

$

106,335

$

31,987

232

%

Less:

   Deferred Compensation Expense

$

1,402

$

1,761

(20)

%

$

1,964

$

765

157

%

   Environmental Remediation
      Expense

$

121

$

722

(83)

%

$

223

$

814

(73)

%

   Business Restructuring

$

5,106

$

-

NM

$

70,545

$

-

NM

Adjusted Corporate Expenses

$

17,999

$

15,336

17

%

$

33,603

$

30,408

11

%

Adjusted Corporate expenses increased $2.7 million, or 17% for the quarter.  This increase was primarily due to higher incentive-based compensation expenses.  

Table V

Stepan Company
Consolidated Balance Sheets
June 30, 2026 and December 31, 2025

June 30, 2026

December 31,
2025

ASSETS

Current Assets

$

974,764

$

858,959

Property, Plant & Equipment, Net

1,142,612

1,219,627

Other Assets

275,290

279,116

Total Assets

$

2,392,666

$

2,357,702

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities

$

846,998

$

666,494

Deferred Income Taxes

10,998

11,450

Long-term Debt

244,069

340,975

Other Non-current Liabilities

78,555

94,773

Total Stepan Company Stockholders' Equity

1,212,046

1,244,010

Total Liabilities and Stockholders' Equity

$

2,392,666

$

2,357,702

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. 

($ in millions)

June 30,
2026

March 31,
2026

December 31,
2025

Net Debt

Total Debt

$

647.4

$

651.7

$

626.7

Cash

113.7

140.8

132.7

Net Debt

$

533.7

$

510.9

$

494.0

Equity

1,212.0

1,193.0

1,244.0

Net Debt + Equity

$

1,745.7

$

1,703.9

$

1,738.0

Net Debt / (Net Debt + Equity)

31

%

30

%

28

%

The major working capital components were:

($ in millions)

June 30,
2026

March 31,
2026

December 31,
2025

Net Receivables

$

492.3

$

433.7

$

388.0

Inventories

324.5

289.0

298.8

Accounts Payable

(321.7)

(285.7)

(261.7)

$

495.1

$

437.0

$

425.1

Table VI

Reconciliations of Non-GAAP EBITDA and Adjusted EBITDA

Management uses the non-GAAP EBITDA and adjusted EBITDA metrics to evaluate the Company's operating performance.  Management excludes the items listed in the table below because they are non-operational items.  Refer to the Income Statement on Table I for a bridge between Operating Income and Net Income.

Three Months Ended
June 30, 2026

($ in millions)

Surfactants

Polymers

Specialty
Products

Unallocated
Corporate

Consolidated

Operating Income

$

34.4

$

22.5

$

5.0

$

(24.6)

$

37.2

   Depreciation and Amortization

20.5

8.7

1.5

0.2

30.9

   Other, Net Income

-

-

-

1.0

1.0

EBITDA

$

69.1

   Deferred Compensation

-

-

-

0.1

0.1

   Environmental Remediation

-

-

-

0.1

0.1

   Business Restructuring

-

-

-

5.1

5.1

Adjusted EBITDA

$

54.9

$

31.2

$

6.5

$

(18.1)

$

74.4

Three Months Ended
June 30, 2025

($ in millions)

Surfactants

Polymers

Specialty
Products

Unallocated
Corporate

Consolidated

Operating Income

$

13.4

$

17.2

$

5.2

$

(17.8)

$

18.0

   Depreciation and Amortization

21.1

8.4

1.5

0.3

31.3

   Other, Net Income

-

-

-

1.3

1.3

EBITDA

$

50.6

   Deferred Compensation

-

-

-

0.1

0.1

   Environmental Remediation

-

-

-

0.7

0.7

Adjusted EBITDA

$

34.5

$

25.6

$

6.7

$

(15.4)

$

51.4

Six Months Ended
June 30, 2026

($ in millions)

Surfactants

Polymers

Specialty
Products

Unallocated
Corporate

Consolidated

Operating Income

$

52.9

$

31.3

$

9.7

$

(106.3)

$

(12.4)

   Depreciation and Amortization

43.1

17.3

2.9

0.6

63.9

   Other, Net Income

-

-

-

1.2

1.2

EBITDA

$

52.7

   Deferred Compensation

-

-

-

0.7

0.7

   Environmental Remediation

-

-

-

0.2

0.2

   Business Restructuring

-

-

-

70.5

70.5

Adjusted EBITDA

$

96.0

$

48.6

$

12.6

$

(33.1)

$

124.1

Six Months Ended
June 30, 2025

($ in millions)

Surfactants

Polymers

Specialty
Products

Unallocated
Corporate

Consolidated

Operating Income

$

42.3

$

25.2

$

10.8

$

(32.0)

$

46.3

   Depreciation and Amortization

40.6

16.4

2.9

0.6

60.5

   Other, Net Income

-

-

-

1.8

1.8

EBITDA

$

108.6

   Deferred Compensation

-

-

-

(0.5)

(0.5)

   Environmental Remediation

-

-

-

0.8

0.8

Adjusted EBITDA

$

82.9

$

41.6

$

13.7

$

(29.3)

$

108.9

SOURCE Stepan Company