Stepan : First Quarter 2026 Results

Published: 2026-04-28 07:44:14 ET SCL

Published on 04/28/2026 at 07:44 am EDT

First Quarter 2026 Earnings Results

April 28, 2026

Reported EBITDA(1) -$16.5MM

Adj. EBITDA(1) $49.6MM

1 Adjusted EBITDA(1) was -14% vs. Q1 2025 - surfactants earnings impacted by

lower absorption and production timing differences in Asia, competitive pressures in Mexico, severe weather impacts in North America, and higher oleochemical raw material costs.

9%

Q1 '26

27%

ADJ EBITDA

Surfactants

Polymers Specialty Products

64%

Reported Net Income -$41.4MM

Adj. Net Income(2) $10.3MM

Adjusted Net Income(2) -47% decline year-over-year, Driven primarily by lower

Surfactant earnings and higher interest expense related to our Pasadena, TX start-up.

2

3

Free Cash Flow(3) -$14.0MM

Free Cashflow improved 46% year-on-year driven by working capital discipline. Leverage ratio improved to 2.7x vs. 2.9x in Q1 2025.

Organic volume Flat YoY, Organic net sales +4% YoY

Strong growth within the Agricultural, Oilfield and Industrial Cleaning end markets offset by decreases in Rigid Polyols in Europe.

4

3%

22%

Q1 '26

NET SALES

Surfactants

Polymers Specialty Products

75%

Project Catalyst on track & Record Safety Performance

We recorded our best quarter performance ever on Safety.

Footprint and asset optimization activities on track. Entered into an agreement to sell non-productive assets, specifically land, at our Millsdale site for $30 million dollars.

5

EBITDA and Adjusted EBITDA are Non-GAAP measures. See Appendices IV and V for GAAP reconciliations.

Adjusted Net Income/Loss is a Non-GAAP measure. See Appendices II and III for a GAAP reconciliation. 3

Free Cash Flow is a Non-GAAP measure. See Appendix VI for GAAP reconciliations.

Stepan Company: Highlights

$4.8 $24.1

$19.3

(2)

($10.4)

$0.8

($0.8)

($2.1)

$11.7

($1.4)

(2)

$10.3

Q1 2025

Tax

Q1 2025

Surfactants

Polymers

Specialty

Corporate

Q1 2026

Tax

Q1 2026

Adjusted

Provision

Pre-Tax

Operating

Operating

Products

Expenses &

Pre-Tax

Provision

Adjusted

Net

Income

Income

Income

Operating

All Other(3)

Income

Net

Income(1)

Income

Income(1)

Note: All amounts are in millions of U.S. dollars.

Adjusted Net Income/Loss and Adjusted EPS are Non-GAAP measures that exclude certain significant, non-recurring items. See Appendix II for GAAP reconciliations.

See Appendix III for Adjustments Details.

Corporate Expenses & All Other consists of the following buckets: I. Corporate Expense of ($0.5) million, II. Other, net of ($0.7) million, and III. Interest 4

Expense of ($0.9) million.

Stepan Company: Financial Results

Q1 2025 to Q1 2026

$57.5

($7.2)

$1.3

($0.8)

($1.1)

$49.6

Q1 2025 Adj. EBITDA(1)

Surfactants Polymers

Specialty Products Corporate Q1 2026 Adj. EBITDA(1)

Note: All amounts are in millions of U.S. dollars.

Surfactants: Adjusted EBITDA declined 15% year-over-year, due to lower overhead absorption resulting from production timing differences in Asia, competitive pressures in Mexico, severe cold weather patterns in the US, and high oleochemical raw materials.

Polymers: Polymer Adjusted EBITDA increased 8% year-over-year, mainly driven by global margin recovery and growth in Spray Foam and commodity Phthalic Anhydride.

Specialty Products: Adjusted EBITDA for Specialty Products declined 11% year-over-year, primarily due to product mix and lag in raw materials prices within the medium-chain triglyceride.

Corporate Expenses: Corporate expenses reflect normal inflation.

Stepan Company: Financial Results

Q1 2025 to Q1 2026

$430.3

Net Sales Bridge

$9.5 $20.6

$453.7

$48.4

Adjusted EBITDA(1) Bridge

($6.7)

($5.6)

($1.9)

$0.3

$41.1

Q1 2025

Volume Price/Mix F/X Q1 2026

Q1 2025

North America Latin America Europe Q1 2026

Net Sales

Net Sales

Adj. EBITDA(1)

+ Asia

Adj. EBITDA(1)

Note: All amounts are in millions of U.S. dollars.

Organic Volume (ex-divestitures) increased 2% year-over-year, primarily driven by solid growth within the Industrial Cleaning, Crop Productivity, and Oilfield end markets

Price/Mix benefited 2% from pass through of higher raw material costs, improved product and customer mix, and pricing actions during the quarter.

F/X positively impacted net sales by 5%.

Note: All amounts are in millions of U.S. dollars.

North America and Asia. Adversely impacted due to production timing differences in Asia, cold weather patterns in the US and raw material (oleochemicals) cost escalation.

Latin America results were impacted by competitive pressures in Mexico; partially offset by organic growth in Commodity Consumer end markets.

Europe results benefited by solid growth in Crop Productivity and Laundry Cleaning end markets; partially offset by lower sales to Middle East countries impacted by the current conflict.

Stepan Company: Business Segments

Surfactants

Q1 2025 to Q1 2026

$146.1

Net Sales Bridge

$4.4

($9.4)

$130.0

Adjusted EBITDA(1) Bridge

$5.2

$17.4

($11.1)

$16.1

($3.6)

($0.3)

Q1 2025

Net Sales

Volume

Price/Mix F/X Q1 2026 Net Sales

Q1 2025 Adj. EBITDA(1)

North America

Europe Asia + Latin America

Q1 2026 Adj. EBITDA(1)

Note: All amounts are in millions of U.S. dollars.

Volume declined 6% year-over-year, by lower demand across European Rigid Polyol markets, partially offset by growth across our North America & Asia Rigid Polyol and Commodity Phthalic Anhydride businesses.

Price/Mix was impacted by 8% due to contracted pass-through of lower raw material costs and competitive pressures, particularly within European markets.

F/X positively impacted net sales by 3%.

Note: All amounts are in millions of U.S. dollars.

North America results benefited from sales volume growth in Spray Foam Polyols and Commodity Phthalic Anhydride businesses, which was partially offset by less favorable product mix.

Europe results were impacted by lower Rigid Polyol demand and continued competitive pressures.

Asia performance reflected stronger demand for Rigid Polyols offset by lower Specialty Polyols demand tied to weakness in Chinese automotive markets.

Stepan Company: Business Segments

Polymers

Q1 2025 to Q1 2026

FREE CASH FLOW(5) - Quarterly

Q1 2026 Working Capital(4)

$437MM

vs. $448MM Q1 2025 ▼ -2% YoY

FY2026 Capex Guidance

$105-115MM

Unchanged

LEVERAGE RATIO - Net Debt(1) / TTM Adj. EBITDA(2)

Net Debt

TTM Adjusted EBITDA

Leverage Ratio(3)

$511MM

$191MM

2.7x

vs. $552MM Q1 2025

vs. $193MM Q1 2025

vs. 2.9x Q1 2025

(3)

(1) Net Debt is a Non-GAAP measure. See Appendix VII for a GAAP reconciliation.

(2) TTM Adjusted EBITDA is a Non-GAAP measure. See Appendix VIII for a GAAP reconciliation.

(3) Net Debt / TTM Adjusted EBITDA Ratio is a Non-GAAP measure. See Appendix VII for a GAAP reconciliation.

(4) Includes the following components of Working Capital: accounts receivable, inventory, accounts payable.

8

(5) Free Cash Flow is a Non-GAAP measure. See Appendix VI for GAAP reconciliations.

Stepan Company: Financial Results

Balance Sheet & Cash Flow

Q1 2025 to Q1 2026

9

Stepan Company: Strategy

Strengthening our Foundation for Long-Term Excellence

Project Catalyst is a comprehensive operational and efficiency initiative designed to deliver approximately $100 million in pre-tax savings over the next two years, with an expected ~60% realized in 2026. This program will streamline our global manufacturing footprint and strengthen the foundation for sustainable and profitable growth.

Cost Optimization

Capturing procurement savings while advancing productivity through end-to-end operational excellence

Optimize production and reduce cost by consolidating volumes into our network at efficient sites and high-performing assets, enhancing scale, reliability and productivity

Implement clear accountabilities across businesses and functions and focus resources to capture market opportunities to advance the Company's growth strategy

$~100MM In Pre-Tax Savings

10

Stepan Company: Project Catalyst

Project Catalyst

Thank You

Ruben Velasquez

Vice President & Chief Financial Officer

+1-847-446-7500

11

Additional Sources of Information and Definitions

(millions USD)

2024 Actual

2025 Actual

2026 Forecast

Capital Expenditures

123

122.5

105 - 115

Debt Repayments*

49

63

59

Interest Net

14

22

25 - 27

Depreciation & Amortization

112

126

125 - 130

Effective Tax Rate (%)

17%

22%

24 - 26%

* Scheduled Principal Payments of Private Placement Notes

Stepan Company: Appendix I

Reconciliation of Non-GAAP Adjusted Net Income and Earnings Per Diluted Share(1)

(1) All amounts in this table are presented after-tax

Reconciliation of Pre-Tax to After-Tax Adjustments

Stepan Company: Appendix II

Reconciliations

Q1 2025 to Q1 2026

Reconciliation of Non-GAAP Adjusted Net Income and Earnings Per Diluted Share(1)

(1) All amounts in this table are presented after-tax

Stepan Company: Appendix III

Reconciliations - Cont.

Q1 2025 to Q1 2026

(1) Refer to Income Statement on appendix V for a bridge between Operating Income and Net Income. 16

Stepan Company: Appendix IV

Reconciliations - Cont.

Q1 2025 to Q1 2026

Three Months Ended

2026

2025

Net Sales

$ 604,509

$ 593,255

Cost of Sales

539,658

517,792

Gross Profit

64,851

75,463

Operating Expenses:

Selling

12,166

12,108

Administrative

21,313

21,414

Research, Development and Technical Services

14,993

14,649

Deferred Compensation Expense

562

(996)

49,034

47,175

Business Restructuring

65,439

-

Operating Income

(49,622 )

28,288

Other Income (Expense):

Interest, Net

(5,011 )

(4,126)

Other, Net

144

502

(4,867 )

(3,624)

Income (Loss) Before Provision for Income Taxes

(54,489 )

24,664

Provision for Income Taxes

(13,083 )

4,953

Net Income (Loss)

(41,406 )

19,711

Net Income (Loss) Per Common Share

Basic

$ (1.81 )

$ 0.86

Diluted

$ (1.81 )

$ 0.86

Shares Used to Compute Net Income Per Common Share

Basic

22,888

22,867

Diluted

22,888

22,890

March 31,

17

Stepan Company: Appendix V

Income Statement

Q1 2025 to Q1 2026

(million USD)

Q1 2026

Q1 2025

Cash Flow from Operations

16.9

6.9

Capital Expenditures

(30.9)

(32.7)

Free Cash Flow

(14.0)

(25.8)

(million USD)

2025

2024

2023

Cash Flow from Operations

147.9

162.1

174.9

Capital Expenditures

(122.5)

(122.8)

(260.3)

Free Cash Flow

25.4

39.3

(85.5)

Stepan Company: Appendix VI

Free Cash Flow (FCF)

Reconciliations - Cont.

(millions USD)

March 31, 2026

December 31, 2025

March 31, 2025

March 31, 2024

March 31, 2023

March 31, 2022

March 31, 2021

Total Debt

651.7

626.7

659.3

646.0

711.0

537.1

248.4

Cash

140.8

132.7

107.5

125.8

127.0

236.0

150.7

Net Debt

511.0

494.0

551.8

520.2

584.0

301.1

97.7

Equity

1,193.0

1,244.0

1,200.5

1,214.5

1,189.9

1,116.7

1,002.3

Net Debt + Equity

1,704.0

1,738.0

1,752.3

1,734.7

1,773.9

1,417.8

1,100.0

Net Debt / (Net Debt + Equity)

30%

28%

31%

30%

33%

21%

9%

Net Debt/TTM Adjusted EBITDA Ratio = 511/191 = 2.7

Stepan Company: Appendix VII

Net Debt to Capital Trend

March 2021 - Q1 2026 (Quarterly)

03/31/2026 TTM - Adjusted EBITDA

Reported Operating Income

0.6

Depreciation & Amortization

129.7

Other Net Income (Expense)

3.1

Deferred Compensation

0.6

Cash Settled SARS

0.0

Goodwill and Other Intangibles Impairment Expense

6.2

Business Restructuring & Asset Impairment Expense

49.5

Environmental Remediation Expense

(0.1)

Adjusted EBITDA

191.1

Stepan Company: Appendix VIII

Trailing Twelve Months

Reconciliations - Cont.

Disclaimer

Stepan Company published this content on April 28, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on April 28, 2026 at 11:43 UTC.