STEPAN CO
For the period ended Sep 30, 2025. Filed Nov 5, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 5, 2025
SCL$66.94-1.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-08-06.
0000950170-25-103639
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-05.
0001193125-25-266074
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 158 previous paragraphs and 158 current paragraphs.
67 unchanged; 75 reworded; 15 added; 14 removed; 2 previous and 1 current paragraphs rearranged.
Tables are not compared: 27 previous and 27 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (15)
Current report
Selling expenses decreased $0.1 million, or one percent, year-over-year.
Current report
The Company’s effective tax rate was 34.4 percent in the third quarter of 2025 versus a negative 10.7 percent in the third quarter of 2024. This increase was primarily attributable to an unfavorable provision-to-return adjustment of the Company’s 2024 tax return, recorded in the third quarter of 2025, and the non-recurrence of a favorable event, related to global intangible low-taxed income (GILTI), in the third quarter of 2024.
Current report
A U.S. tax act (H.R.1) was signed into law on July 4, 2025 (the 2025 U.S. Tax Act). The Company has evaluated the impact of the 2025 U.S. Tax Act and the provisions that will have the most relevance to the Company are bonus depreciation, the immediate expensing of domestic research and development costs, the elimination of the ability to elect out of the §280(c) R&D tax credit reduction and the increased limitation on the deduction for interest expense. Although the Company continues to analyze the impact of these new provisions, it does not currently believe these items will have a material impact on the Company's financial results, financial position, liquidity or cash flows in 2025.
Current report
Net sales for Asian operations increased $2.3 million, or 16 percent, versus the prior year quarter. An eight percent increase in sales volume and higher average selling prices favorably impacted the change in net sales by $1.1 million each, year-over-year. The higher sales volume was primarily due to the increased demand for products sold into the commodity laundry and cleaning end markets. Foreign currency translation positively impacted the year-over-year change in net sales by $0.1 million.
Current report
Surfactant operating income for the third quarter of 2025 decreased $10.6 million, or 40 percent, versus operating income for the third quarter of 2024. Gross profit decreased $9.5 million, or 19 percent, and operating expenses increased $1.1 million, or five percent. Comparisons of gross profit by region and total segment operating expenses and operating income follow:
Current report
Operating expenses for the Surfactant segment increased $1.1 million, or five percent, in the third quarter of 2025 versus the third quarter of 2024.
Current report
Polymers net sales for the third quarter of 2025 decreased $5.9 million versus net sales for the same period of 2024. Lower average selling prices negatively impacted the year-over-year change in net sales by $21.3 million. An eight percent increase in sales volume and the favorable impact of foreign currency translation positively impacted the change in net sales by $12.5 million and $2.9 million, respectively. A comparison of net sales by region follows:
Current report
Net sales for Asia and Other operations decreased $0.9 million, or seven percent, primarily due to lower average selling prices that negatively impacted the year-over-year change in net sales by $1.1 million. A two percent increase in sales volume positively impacted the year-over-year change in net sales by $0.2 million.
Current report
Gross profit for North American operations increased $1.0 million, or nine percent, year-over-year. The 21 percent increase in sales volume positively impacted the year-over-year change in gross profit by $2.4 million. Lower average unit margins negatively impacted the change in gross profit by $1.4 million. The lower average unit margins were primarily due to less favorable product mix.
Current report
Nine Months Ended September 30, 2025 and 2024
Current report
Administrative expenses decreased $6.4 million, or nine percent, year-over-year primarily due to the non-recurrence of $6.8 million of expense, related to a criminal social engineering fraud scheme, recognized in the second and third quarters of 2024.
Current report
A U.S. tax act (H.R.1) was signed into law on July 4, 2025 (the 2025 U.S. tax act). The Company evaluated the impact of the 2025 U.S. tax act and the provisions that will have the most relevance to the Company are bonus depreciation, the immediate expensing of domestic research and development costs, the elimination of the ability to elect out of the §280(c) R&D tax credit reduction, and the increased limitation on the deduction for interest expense. Although the Company continues to analyze the impact of these new provisions, it does not currently believe these items will have a material impact on the Company's financial results, financial position, liquidity or cash flows in 2025.
Current report
Surfactant operating income for the first nine months of 2025 decreased $11.4 million, or 16 percent, versus operating income for the first nine months of 2024. Gross profit decreased $6.4 million, or five percent, and operating expenses increased $5.0 million, or seven percent. Comparisons of gross profit by region and total segment operating expenses and operating income follow:
Current report
Gross profit for North American operations increased $3.5 million, or 13 percent, year-over-year. The 17 percent increase in sales volume positively impacted the year-over-year change in gross profit by $4.7 million. Lower average unit margins negatively impacted the year-over-year change in gross profit by $1.2 million.
Current report
Gross profit for European operations decreased $1.5 million, or six percent, versus the first nine months of 2024. This decrease was primarily due to lower average unit margins that negatively impacted the year-over-year change in gross profit by $2.3 million. Foreign currency translation positively impacted the change in gross profit by $0.8 million.
Removed paragraphs (14)
Previous report
Selling expenses increased $2.8 million, or 24 percent, largely due to a $1.1 million USEPA penalty associated with certain of the Company's biocide products sold by a licensed distributor. Higher incentive-based compensation and bad debt provision expenses also contributed to this increase.
Previous report
Administrative expenses decreased $1.8 million, or seven percent, year-over-year primarily due to the non-recurrence of a $3.5 million charge, related to a criminal social engineering scheme, in the second quarter of 2024. This decrease was partially offset by higher legacy-related environmental reserve expenses in 2025.
Previous report
The Company’s effective tax rate was 17.7 percent in the second quarter of 2025 versus 44.7 percent in the second quarter of 2024. This decrease was primarily attributable to the non-recurrence of an unfavorable event, related to a global intangible low-taxed income (GILTI) deduction and a foreign tax credit, in the second quarter of 2024, along with a favorable tax audit settlement and a more favorable geographical mix of income in 2025. In the second quarter of 2024, the Company intended to elect bonus depreciation for its new alkoxylation facility in Pasadena, Texas. The Company expected that, as a result of this election, it would lose its ability to use GILTI deduction and related GILTI foreign tax credits for 2024, resulting in a higher effective tax rate than in the second quarter of 2025, when the Company did not expect to lose such deduction and foreign tax credits.
Previous report
Net sales for Asian operations decreased $0.3 million, or two percent, versus the prior year quarter. A seven percent decrease in sales volume negatively impacted the change in net sales by $0.9 million. The lower sales volume was primarily due to lower demand for products sold into the commodity laundry and cleaning end markets that was partially offset by higher sales to our distribution partners. Higher average selling prices and the favorable impact of foreign currency translation positively impacted the year-over-year change in net sales by $0.3 million, each.
Previous report
Surfactant operating income for the second quarter of 2025 decreased $3.7 million, or 22 percent, versus operating income for the second quarter of 2024. Gross profit was flat year-over-year and operating expenses increased $3.6 million, or 15 percent. Comparisons of gross profit by region and total segment operating expenses and operating income follow:
Previous report
Gross profit for European operations increased $1.7 million, or 26 percent, primarily due to higher average unit margins and the favorable impact of foreign currency translation. These items positively impacted the year-over-year change in gross profit by $1.5 million and $0.4 million, respectively. The higher average unit margins primarily reflect more favorable product mix. A four percent decrease in sales volume negatively impacted the year-over-year change in gross profit by $0.2 million.
Previous report
Polymers net sales for the second quarter of 2025 increased $3.0 million versus net sales for the same period of 2024. A seven percent increase in sales volume and the favorable impact of foreign currency translation positively impacted the change in net sales by $11.6 million and $3.6 million, respectively. Lower average selling prices negatively impacted the year-over-year change in net sales by $12.2 million. A comparison of net sales by region follows:
Previous report
Gross profit for North American operations increased $2.5 million, or 22 percent, year-over-year. The 18 percent increase in sales volume positively impacted the year-over-year change in gross profit by $2.0 million. Higher average unit margins positively impacted the change in gross profit by $0.5 million. The higher average unit margins were primarily due to the non-recurrence of a phthalic anhydride related catalyst write-off charge and higher expenses incurred at the Company's Millsdale, Illinois site due to operational issues during the second quarter of 2024.
Previous report
Gross profit for Asia and Other operations increased $0.3 million, or 14 percent, primarily due to higher average unit margins that positively impacted the change in gross profit by $0.5 million. The higher average unit margins primarily reflect better product mix resulting from the Company's recent diversification efforts. Foreign currency translation negatively impacted the year-over-year change in gross profit by $0.2 million.
Previous report
Six Months Ended June 30, 2025 and 2024
Previous report
Surfactant operating income for the first half of 2025 decreased $0.8 million, or two percent, versus operating income for the first half of 2024. Gross profit increased $3.1 million, or three percent, and operating expenses increased $4.0 million, or eight percent. Comparisons of gross profit by region and total segment operating expenses and operating income follow:
Previous report
Operating expenses for the Surfactant segment increased $4.0 million, or eight percent, in the first half of 2025 versus the first half of 2024. The increase was largely due to a $1.1 million EPA penalty associated with the Company's biocide products sold to a licensed distributor along with higher salaries, incentive-based compensation and bad debt provision expenses. The Company is pursuing indemnification claims against two third parties to recover the cost of the EPA penalty.
Previous report
Gross profit for North American operations increased $2.5 million, or 16 percent, year-over-year. The 16 percent increase in sales volume positively impacted the year-over-year change in gross profit by $2.5 million. Average unit margins were flat year-over-year.
Previous report
Company’s manufacturing locations were $21.1 million and $28.6 million for the six months ended June 30, 2025 and 2024, respectively.
Reworded paragraphs (75)
Previous wording
international business risks, including changes in global trade policy, including tariffs, retaliatory measures and countermeasures, currency exchange controls, fluctuations in currency exchange rates, legal restrictions and taxes;
Current wording
international business risks, including changes in global trade policy, tariffs, retaliatory measures and countermeasures, currency exchange controls, fluctuations in currency exchange rates, legal restrictions and taxes;
Previous wording
Surfactants – Surfactants, which accounted for 71 percent of consolidated net sales for the first six months of 2025, are principal ingredients in consumer and industrial cleaning and disinfection products such as detergents for washing clothes, dishes, carpets, floors and walls, as well as shampoos and body washes. Other applications include fabric softeners, germicidal quaternary compounds, disinfectants, lubricating ingredients, emulsifiers for spreading agricultural products and industrial applications such as latex systems, plastics and composites. Surfactants are manufactured at five sites in the United States, two European sites (United Kingdom and France), five Latin American sites (one site in Colombia and two sites in each of Mexico and Brazil) and two Asian sites (Philippines and Singapore).
Current wording
Surfactants – Surfactants, which accounted for 72 percent of consolidated net sales for the first nine months of 2025, are principal ingredients in consumer and industrial cleaning and disinfection products such as detergents for washing clothes, dishes, carpets, floors and walls, as well as shampoos and body washes. Other applications include fabric softeners, germicidal quaternary compounds, disinfectants, lubricating ingredients, emulsifiers for spreading agricultural products and industrial applications such as latex systems, plastics and composites. Surfactants are manufactured at five sites in the United States, two European sites (United Kingdom and France), five Latin American sites (one site in Colombia and two sites in each of Mexico and Brazil) and two Asian sites (Philippines and Singapore).
Previous wording
Polymers – Polymers, which accounted for 26 percent of consolidated net sales for the first six months of 2025, include polyurethane polyols, polyester resins and phthalic anhydride. Polyurethane polyols are used in the manufacture of rigid foam for thermal insulation in the construction industry and are also a base raw material for coatings, adhesives, sealants and elastomers (collectively, CASE products). Powdered polyester resins are used in coating applications. CASE and powdered polyester resins are collectively referred to as specialty polyols. Phthalic anhydride is used in unsaturated polyester resins, alkyd resins and plasticizers for applications in construction materials and components of automotive, boating and other consumer products. In addition, the Company uses phthalic anhydride internally in the production of polyols. In the United States, polyurethane polyols are manufactured at the Company’s Elwood, Illinois (Millsdale) and Wilmington, North Carolina sites. Phthalic anhydride is manufactured at the Company’s Millsdale site and specialty polyols are manufactured at the Company’s Columbus, Georgia, site. In Europe, polyurethane polyols are manufactured at the Company’s plants in Germany and the Netherlands and specialty polyols are manufactured at the Company’s Poland site. In Asia, polyurethane polyols and specialty polyols are manufactured at the Company’s China plant.
Current wording
Polymers – Polymers, which accounted for 25 percent of consolidated net sales for the first nine months of 2025, include polyurethane polyols, polyester resins and phthalic anhydride. Polyurethane polyols are used in the manufacture of rigid foam for thermal insulation in the construction industry and are also a base raw material for coatings, adhesives, sealants and elastomers (collectively, CASE products). Powdered polyester resins are used in coating applications. CASE and powdered polyester resins are collectively referred to as specialty polyols. Phthalic anhydride is used in unsaturated polyester resins, alkyd resins and plasticizers for applications in construction materials and components of automotive, boating and other consumer products. In addition, the Company uses phthalic anhydride internally in the production of polyols. In the United States, polyurethane polyols are manufactured at the Company’s Elwood, Illinois (Millsdale) and Wilmington, North Carolina sites. Phthalic anhydride is manufactured at the Company’s Millsdale site and specialty polyols are manufactured at the Company’s Columbus, Georgia, site. In Europe, polyurethane polyols are manufactured at the Company’s plants in Germany and the Netherlands and specialty polyols are manufactured at the Company’s Poland site. In Asia, polyurethane polyols and specialty polyols are manufactured at the Company’s China plant.
Previous wording
Specialty Products – Specialty products, which accounted for three percent of consolidated net sales for the first six months of 2025, include flavors, emulsifiers and solubilizers used in food, flavoring, nutritional supplement and pharmaceutical applications. Specialty products are primarily manufactured at the Company’s Maywood, New Jersey, site.
Current wording
Specialty Products – Specialty products, which accounted for three percent of consolidated net sales for the first nine months of 2025, include flavors, emulsifiers and solubilizers used in food, flavoring, nutritional supplement and pharmaceutical applications. Specialty products are primarily manufactured at the Company’s Maywood, New Jersey, site.
Previous wording
The Company’s foreign subsidiaries transact business and report financial results in their respective local currencies. As a result, foreign subsidiary income statements are translated into U.S. dollars at average foreign exchange rates appropriate for the reporting period. Because foreign exchange rates fluctuate against the U.S. dollar over time, foreign currency translation affects period-to-period comparisons of financial statement items (i.e., because foreign exchange rates fluctuate, similar period-to-period local currency results for a foreign subsidiary may translate into different U.S. dollar results). The following table presents the effects that foreign currency translation had on the period-over-period changes in consolidated net sales and various income statement line items for the three and six months ended June 30, 2025 and 2024:
Current wording
The Company’s foreign subsidiaries transact business and report financial results in their respective local currencies. As a result, foreign subsidiary income statements are translated into U.S. dollars at average foreign exchange rates appropriate for the reporting period. Because foreign exchange rates fluctuate against the U.S. dollar over time, foreign currency translation affects period-to-period comparisons of financial statement items (i.e., because foreign exchange rates fluctuate, similar period-to-period local currency results for a foreign subsidiary may translate into different U.S. dollar results). The following table presents the effects that foreign currency translation had on the period-over-period changes in consolidated net sales and various income statement line items for the three and nine months ended September 30, 2025 and 2024:
Previous wording
Net income in the second quarter of 2025 was $11.3 million, or $0.50 per diluted share, versus $9.5 million, or $0.42 per diluted share, in the second quarter of 2024. Adjusted net income was $12.0 million, or $0.52 per diluted share, versus $9.4 million, or $0.41 per diluted share in the second quarter of 2024 (see the “Reconciliation of Non-GAAP Adjusted Net Income and Diluted Earnings per Share” section of this MD&A for a reconciliation between reported net income and reported earnings per diluted share and non-GAAP adjusted net income and adjusted earnings per diluted share). Earnings before interest, taxes, depreciation and amortization (EBITDA) were $50.6 million in the second quarter of 2025, up six percent, versus $47.9 million in the second quarter of 2024. Adjusted EBITDA was $51.4 million, up eight percent, versus $47.7 million in the second quarter of 2024 (see the "Reconciliation of non-GAAP EBITDA and Adjusted EBITDA" section of this MD&A for a reconciliation between reported operating income and non-GAAP EBITDA and Adjusted EBITDA). Below is a summary discussion of the major factors leading to the changes in net sales, expenses and income in the second quarter of 2025 compared to the second quarter of 2024. A detailed discussion of segment operating performance for the second quarter of 2025, compared to the second quarter of 2024, follows the summary.
Current wording
Net income in the third quarter of 2025 was $10.8 million, or $0.47 per diluted share, versus $23.6 million, or $1.03 per diluted share, in the third quarter of 2024. Adjusted net income was $10.9 million, or $0.48 per diluted share, versus $23.7 million, or $1.03 per diluted share in the third quarter of 2024 (see the “Reconciliation of Non-GAAP Adjusted Net Income and Diluted Earnings per Share” section of this MD&A for a reconciliation between reported net income and reported earnings per diluted share and non-GAAP adjusted net income and adjusted earnings per diluted share). Earnings before interest, taxes, depreciation and amortization (EBITDA) were $56.1 million in the third quarter of 2025, up six percent, versus $53.0 million in the third quarter of 2024. Adjusted EBITDA was $56.2 million, up six percent, versus $53.1 million in the third quarter of 2024 (see the "Reconciliation of non-GAAP EBITDA and Adjusted EBITDA" section of this MD&A for a reconciliation between reported operating income and non-GAAP EBITDA and Adjusted EBITDA). Below is a summary discussion of the major factors leading to the changes in net sales, expenses and income in the third quarter of 2025 compared to the third quarter of 2024. A detailed discussion of segment operating performance for the third quarter of 2025, compared to the third quarter of 2024, follows the summary.
Previous wording
Consolidated net sales increased $38.3 million, or seven percent, versus the prior year quarter. Higher average selling prices favorably impacted the year-over-year change in net sales by $32.5 million. The increase in average selling prices was mainly attributable to the pass-through of higher raw material costs and more favorable product mix. Consolidated sales volume increased one percent, which favorably impacted the change in net sales by $7.5 million. Polymer and Specialty Products sales volumes increased seven and 33 percent, respectively, year-over-year. Surfactant sales volume decreased one percent. Foreign currency translation negatively impacted the year-over-year change in net sales by $1.7 million, primarily due to a stronger U.S. dollar against the Brazilian real and Mexican peso.
Current wording
Consolidated net sales increased $43.4 million, or eight percent, versus the prior year quarter. Higher average selling prices favorably impacted the year-over-year change in net sales by $30.8 million. The increase in average selling prices was mainly attributable to the pass-through of higher raw material costs and more favorable product mix. Consolidated sales volume increased one percent, which favorably impacted the change in net sales by $4.0 million. Polymer and Specialty Products sales volume increased eight and 26 percent, respectively, year-over-year. Surfactant sales volume decreased two percent. Foreign currency translation favorably impacted the year-over-year change in net sales by $8.6 million, due to a weaker U.S. dollar against the majority of currencies in locations where the Company conducts its business.
Previous wording
Operating income in the second quarter of 2025 decreased $0.7 million, or four percent, versus operating income in the second quarter of 2024. Polymer operating income increased $3.6 million versus the second quarter of 2024. Surfactant and Specialty Products operating income decreased $3.7 million and $2.1 million, respectively, year-over-year. Corporate expenses, including environmental remediation and deferred compensation expenses, decreased $1.5 million, or eight percent, year-over-year. Corporate expenses, excluding environmental remediation and deferred compensation expenses, decreased $3.3 million, or 18 percent, year-over-year. Foreign currency translation had a $0.2 million unfavorable impact on operating income year-over-year.
Current wording
Operating income in the third quarter of 2025 decreased $2.1 million, or nine percent, versus operating income in the third quarter of 2024. Surfactant and Polymer operating incomes decreased $10.6 million and $1.1 million, respectively, versus the third quarter of 2024. Specialty Products operating income increased $5.9 million year-over-year. Corporate expenses, including environmental remediation and deferred compensation expenses, decreased $3.7 million, or 17 percent, year-over-year. Corporate expenses, excluding environmental remediation and deferred compensation expenses, decreased $3.8 million, or 19 percent, year-over-year. The decrease in corporate expenses is primarily due to the non-recurrence of prior year charges associated with an external criminal social engineering fraud event. Foreign currency translation had a $0.5 million favorable impact on operating income year-over-year.
Previous wording
Operating expenses (including deferred compensation) increased $3.0 million, or six percent year-over-year. Changes in the individual income statement line items that comprise the Company’s operating expenses were as follows:
Current wording
Operating expenses (including deferred compensation) decreased $2.5 million, or five percent year-over-year. Changes in the individual income statement line items that comprise the Company’s operating expenses were as follows:
Previous wording
Administrative expenses decreased $3.0 million, or six percent, year-over-year primarily due to the non-recurrence of a $3.5 million charge, related to a criminal social engineering scheme, in the second quarter of 2024.
Current wording
Administrative expenses decreased $3.4 million, or 13 percent, year-over-year, primarily due to the non-recurrence of a $3.3 million charge, related to an external criminal social engineering scheme fraud event, in the third quarter of 2024.
Previous wording
Research, development and technical service (R&D) expenses increased $0.6 million, or four percent.
Current wording
Research, development and technical service (R&D) expenses increased $0.7 million, or five percent.
Previous wording
Deferred compensation was $1.8 million of expense in the second quarter of 2025 versus $0.4 million of expense in the prior year quarter. The $1.4 million year-over-year increase in deferred compensation expense primarily reflects a larger increase in the market value of mutual fund investment assets during the second quarter of 2025 versus the second quarter of 2024. Additionally, the market price of the Company's common stock decreased $0.46 per share in the second quarter of 2025 versus a $6.08 per share decrease in the second quarter of 2024. See the Overview and Segment Results-Corporate Expenses section of this MD&A for further details.
Current wording
Deferred compensation was $0.8 million of expense in the third quarter of 2025 versus $0.6 million of expense in the prior year quarter. The $0.2 million increase in deferred compensation expense reflects a larger increase in the market value of mutual fund investment assets during the third quarter 2025 versus the third quarter of 2024. In addition, despite a slightly larger decrease in the market price of the Company's common stock year-over-year, the number of shares of the Company's common stock in the deferred compensation plans was significantly lower year-over-year. See the Overview and Segment Results-Corporate Expenses section of this MD&A for further details.
Previous wording
Net interest expense for the second quarter of 2025 increased $2.8 million versus the second quarter of 2024. This increase was primarily attributable to lower U.S. capitalized interest income recognized in 2025 as the Company's new specialty alkoxylation facility in Pasadena, Texas started up in April 2025.
Current wording
Net interest expense for the third quarter of 2025 increased $3.2 million versus the third quarter of 2024. This increase was primarily attributable to lower U.S. capitalized interest income recognized in 2025 as the Company's new specialty alkoxylation facility in Pasadena, Texas started up in April 2025.
Previous wording
Other, net was $1.3 million of income in the second quarter of 2025 versus $1.2 million of income in the second quarter of 2024. The Company recognized $1.7 million of investment gains (including realized and unrealized gains and losses) for the Company’s deferred compensation and supplemental defined contribution mutual fund assets in the second quarter of 2025 compared to $0.8 million of investment gains in the second quarter of 2024. In addition, the Company reported $0.6 million of foreign exchange losses in the second quarter of 2025 versus less than $0.1 million of foreign exchange losses in the second quarter of 2024. The Company's net periodic pension income was $0.3 million in the second quarter of 2025 versus $0.4 million of income in the second quarter of 2024.
Current wording
Other, net was $1.5 million of income in the third quarter of 2025 versus $1.0 million of income in the third quarter of 2024. The Company recognized $1.0 million of investment gains (including realized and unrealized gains and losses) for the Company’s deferred compensation and supplemental defined contribution mutual fund assets in both the third quarter of 2025 and 2024. In addition, the Company reported $0.2 million of foreign exchange gains in the third quarter of 2025 versus $0.5 million of foreign exchange losses in the third quarter of 2024. The Company's net periodic pension income was $0.3 million in the third quarter of 2025 versus $0.4 million of income in the third quarter of 2024.
Previous wording
Surfactant net sales for the second quarter of 2025 increased $31.7 million versus net sales for the second quarter of 2024. Higher average selling prices favorably impacted the change in net sales by $40.9 million. The higher average selling prices were mainly attributable to the pass through of higher raw material costs and a more favorable product mix. Sales volume decreased one percent and had a $3.7 million unfavorable impact on the change in net sales. Foreign currency translation had an $5.5 million unfavorable impact on the year-over-year change in net sales. A comparison of net sales by region follows:
Current wording
Surfactant net sales for the third quarter of 2025 increased $39.6 million versus net sales for the third quarter of 2024. Higher average selling prices favorably impacted the change in net sales by $41.4 million. The higher average selling prices were mainly attributable to the pass through of higher raw material costs and a more favorable product mix. Sales volume decreased two percent and had a $7.3 million unfavorable impact on the change in net sales. Foreign currency translation had a $5.5 million favorable impact on the year-over-year change in net sales. A comparison of net sales by region follows:
Previous wording
Net sales for North American operations increased $13.8 million, or six percent, year-over-year. Higher average selling prices had an $8.9 million favorable impact on the change in net sales and were primarily due to the pass-through of higher raw material costs and more favorable product mix. Sales volume increased two percent and positively impacted the change in net sales by $5.0 million. The higher sales volume was primarily due to higher demand for products sold into the agricultural and oilfield end markets and to our distribution partners. Lower demand for products sold into the consumer products end markets partially offset the above. Foreign currency translation negatively impacted the change in net sales by $0.1 million.
Current wording
Net sales for North American operations increased $15.5 million, or seven percent, year-over-year. Higher average selling prices had a $17.4 million favorable impact on the change in net sales and were primarily due to the pass-through of higher raw material costs and more favorable product mix. Sales volume decreased one percent and negatively impacted the change in net sales by $1.8 million. The lower sales volume was primarily due to lower demand for products sold into the consumer products end markets that was largely offset by higher demand for products sold into the agricultural and oilfield end markets and to our distribution partners. Foreign currency translation negatively impacted the change in net sales by $0.1 million.
Previous wording
Net sales for European operations increased $11.1 million, or 18 percent, due to higher average selling prices and the favorable impact of foreign currency translation. These items positively impacted the change in net sales by $9.8 million and $3.9 million, respectively. The higher average selling prices were primarily due to the pass-through of higher raw material costs and more favorable product mix. A weaker U.S. dollar relative to the European euro and British pound sterling led to the favorable foreign currency translation effect. Sales volume declined four percent and negatively impacted the change in net sales by $2.6 million. The lower sales volume was primarily due to lower demand for products sold into the commodity laundry and cleaning end markets that was partially offset by the higher demand for products sold into agricultural end markets.
Current wording
Net sales for European operations increased $8.0 million, or 12 percent, primarily due to higher average selling prices and the favorable impact of foreign currency translation. These items positively impacted the change in net sales by $7.5 million and $3.9 million, respectively. The higher average selling prices were primarily due to the pass-through of higher raw material costs and more favorable product mix. A weaker U.S. dollar relative to the European euro and British pound sterling led to the favorable foreign currency translation effect. Sales volume declined five percent and negatively impacted the change in net sales by $3.4 million. The lower sales volume was primarily due to lower demand for products sold to our distribution partners and into the consumer products end markets. Higher demand for products sold into agricultural end markets partially offset the above.
Previous wording
Net sales for Latin American operations increased $7.0 million, or eight percent, primarily due to higher average selling prices that positively impacted the change in net sales by $19.7 million. The higher average selling prices primarily reflect more favorable product mix and the pass-through of higher raw material costs. The unfavorable impact of foreign currency translation and a four percent decrease in sales volume negatively impacted the change in net sales by $9.6 million and $3.2 million, respectively. A stronger U.S. dollar relative to all currencies within the region led to the unfavorable foreign currency translation effect. The lower sales volume was primarily due to lower demand for products sold into the commodity laundry and cleaning end markets that was partially offset by higher demand for products sold into the personal care and agricultural end markets.
Current wording
Net sales for Latin American operations increased $13.8 million, or 16 percent, primarily due to higher average selling prices that positively impacted the change in net sales by $15.1 million. The higher average selling prices primarily reflect more favorable product mix and the pass-through of higher raw material costs. Foreign currency translation positively impacted the change in net sales by $1.7 million. A weaker U.S. dollar relative to all currencies within the region led to the favorable foreign currency translation effect. A four percent decrease in sales volume negatively impacted the change in net sales by $3.0 million. The lower sales volume was primarily due to lower demand for products sold into the commodity laundry and cleaning end markets that was partially offset by higher demand for products sold into the personal care and industrial cleaning end markets.
Previous wording
Gross profit for North American operations decreased $6.1 million, or 12 percent, versus the prior year primarily due to lower average unit margins. The lower average unit margins negatively impacted the year-over-year change in gross profit by $7.5 million and were primarily attributable to higher expenses associated with the start-up of the Company's new alkoxylation facility in Pasadena, Texas, higher Oleochemical raw material costs that the Company plans to recover in the second half of the year, and an environmental reserve adjustment related to the Company's Elwood, Illinois site. A three percent increase in sales volume positively impacted the year-over-year change in gross profit by $1.5 million. Foreign currency translation negatively impacted the year-over-year change in gross profit by $0.1 million.
Current wording
Gross profit for North American operations decreased $5.9 million, or 23 percent, versus the prior year primarily due to lower average unit margins. The lower average unit margins negatively impacted the year-over-year change in gross profit by $5.7 million and were primarily attributable to higher expenses associated with the start-up of the Company's new alkoxylation facility in Pasadena, Texas and higher oleochemical raw material costs. A one percent decrease in sales volume negatively impacted the change in gross profit by $0.2 million.
Previous wording
Gross profit for European operations increased $1.2 million, or 16 percent, versus the second quarter of 2024. This increase was primarily due to higher average unit margins and the favorable impact of foreign currency translation. These two items positively impacted the year-over-year change in gross profit by $0.7 million and $0.5 million, respectively.
Current wording
Gross profit for European operations decreased $1.1 million, or 12 percent, primarily due to lower average unit margins and a five percent decrease in sales volume. These items negatively impacted the year-over-year change in gross profit by $1.1 million and $0.5 million, respectively. Foreign currency translation positively impacted the year-over-year change in gross profit by $0.5 million.
Previous wording
Gross profit for Latin American operations decreased $0.2 million, or one percent. Higher average unit margins positively impacted the year-over-year change in gross profit by $1.3 million and reflect a more favorable product mix. The unfavorable impact of foreign currency translation and a four percent decrease in sales volume negatively impacted the change in gross profit by $1.1 million and $0.4 million, respectively.
Current wording
Gross profit for Latin American operations decreased $0.9 million, or eight percent. Lower average unit margins and a four percent decrease in sales volume negatively impacted the year-over-year change in gross profit by $0.6 million and $0.4 million, respectively. Foreign currency translation positively impacted the year-over-year change in gross profit by $0.1 million.
Previous wording
Gross profit for Asia operations decreased $0.5 million year-over-year due to lower average unit margins and the seven percent decrease in sales volume. These items negatively impacted the year-over-year change in gross profit by $0.3 million and $0.2 million, respectively.
Current wording
Gross profit for Asia operations decreased $1.7 million year-over-year. Lower average unit margins negatively impacted the year-over-year change in gross profit by $2.0 million. An eight percent increase in sales volume positively impacted the year-over-year change in gross profit by $0.3 million.
Previous wording
Net sales for North American operations increased $8.4 million, or 11 percent, primarily due to an 18 percent increase in sales volume that positively impacted the year-over-year change in net sales by $14.2 million. Sales volume of polyols used in rigid foam applications increased three percent year-over-year. Sales volume of commodity phthalic anhydride grew more than double digits primarily due to the market exit of a competitor. Specialty Polyols sales volume declined nine percent year-over-year. Lower average selling prices negatively impacted the year-over-year change in net sales by $5.8 million. The lower average selling prices primarily reflect the pass-through of lower raw material costs and less favorable product mix.
Current wording
Net sales for North American operations increased $4.8 million, or six percent, due to a 21 percent increase in sales volume that positively impacted the year-over-year change in net sales by $15.9 million. Sales volume of polyols used in rigid foam applications increased 11 percent year-over-year. Sales volume of commodity phthalic anhydride grew more than double digits primarily due to the market exit of a competitor. Specialty Polyols sales volume declined six percent year-over-year. Lower average selling prices negatively impacted the year-over-year change in net sales by $11.1 million. The lower average selling prices primarily reflect the pass-through of lower raw material costs and less favorable product mix.
Previous wording
Net sales for European operations decreased $6.8 million, or five percent, year-over-year. This decrease was mainly due to lower average selling prices that negatively impacted the year-over-year change in net sales by $12.6 million. The lower average selling prices were primarily due to the pass-through of lower raw material costs and increased competitive activity. Foreign currency translation positively impacted the change in net sales by $3.5 million. A two percent increase in sales volume, driven by a two percent increase in rigid polyols, positively impacted the change in net sales by $2.3 million.
Current wording
Net sales for European operations decreased $9.8 million, or 15 percent, year-over-year. This decrease was primarily due to lower average selling prices that negatively impacted the year-over-year change in net sales by $10.5 million. The lower average selling prices were primarily due to the pass-through of lower raw material costs and increased competitive activity. A three percent decrease in sales volume negatively impacted the change in net sales by $2.2 million. Foreign currency translation positively impacted the change in net sales by $2.9 million. A weaker U.S. dollar relative to the Polish zloty and British pound sterling led to the favorable foreign currency translation effect.
Previous wording
Polymer operating income in the second quarter of 2025 increased $3.6 million, or 26 percent, versus operating income in the second quarter of 2024. Gross profit increased $4.0 million, or 19 percent and operating expenses increased 0.4 million or six percent year-over-year. Comparisons of gross profit by region and total segment operating expenses and operating income follow:
Current wording
Polymer operating income in the third quarter of 2025 decreased $1.1 million, or eight percent, versus operating income in the third quarter of 2024. Gross profit decreased $0.9 million, or four percent, and operating expenses increased $0.3 million, or four percent, year-over-year. Comparisons of gross profit by region and total segment operating expenses and operating income follow:
Previous wording
Gross profit for European operations increased $0.2 million, or one percent, versus the first half of 2024. This increase was primarily due to the favorable impact of foreign currency translation and a two percent increase in sales volume. These items positively impacted the year-over-year change in gross profit by $0.4 million and $0.3 million, respectively. Lower average unit margins negatively impacted the year-over-year change in gross profit by $0.5 million.
Current wording
Gross profit for European operations decreased $1.7 million, or 20 percent, versus the third quarter of 2024. This decrease was primarily due to lower average unit margins and a three percent decrease in sales volume. These items negatively impacted the year-over-year change in gross profit by $1.8 million and a $0.3 million, respectively. Foreign currency translation positively impacted the change in gross profit by $0.4 million.
Previous wording
Operating expenses for the Polymer segment increased $0.4 million, or six percent, in the second quarter of 2025 versus the second quarter of 2024.
Current wording
Operating expenses for the Polymer segment increased $0.3 million, or four percent, in the third quarter of 2025 versus the third quarter of 2024.
Previous wording
Specialty Products net sales for the second quarter of 2025 increased $3.6 million, or 22 percent, versus net sales for the second quarter of 2024. This increase was primarily due to higher sales volume. Gross profit and operating income decreased $1.9 million and $2.1 million, respectively, year-over-year. The decrease in gross profit and operating income primarily reflects order timing differences within the pharmaceutical business as typical second quarter sales orders were moved to the second half of the year.
Current wording
Specialty Products net sales for the third quarter of 2025 increased $9.7 million, or 68 percent, versus net sales for the third quarter of 2024. This increase was primarily due to higher sales volume that was driven by order timing fluctuations within the pharmaceutical business. Gross profit and operating income increased $6.0 million and $5.9 million, respectively, year-over-year.
Previous wording
Corporate expenses, which include deferred compensation and other operating expenses that are not allocated to the reportable segments, decreased $1.5 million, or eight percent, year-over-year. Corporate expenses were $17.8 million in the second quarter of 2025 versus $19.3 million in the second quarter of 2024. This decrease was primarily due to the non-recurrence of a $3.5 million expense, related to a criminal social engineering scheme, during the second quarter of 2024. Higher deferred compensation and legacy environmental reserve expenses, which were up $1.4 million and $0.5 million, respectively, partially offset the above.
Current wording
Corporate expenses, which include deferred compensation and other operating expenses that are not allocated to the reportable segments, decreased $3.7 million, or 17 percent, year-over-year. Corporate expenses were $17.7 million in the third quarter of 2025 versus $21.3 million in the third quarter of 2024. This decrease was primarily due to the non-recurrence of a $3.3 million expense, related to a criminal social engineering fraud scheme, recognized in the third quarter of 2024.
Previous wording
The $1.4 million year-over-year increase in deferred compensation expense primarily reflects a larger increase in the market value of mutual fund investment assets during the second quarter of 2025 versus the second quarter of 2024. Additionally, the market price of the Company's common stock decreased $0.46 per share in the second quarter of 2025 versus a $6.08 per share decrease in the second quarter of 2024.
Current wording
Deferred compensation expense increased $0.3 million year-over-year. This increase reflects a larger increase in the market value of mutual fund investment assets during the third quarter 2025 versus the third quarter of 2024. Additionally, the market price of the Company's common stock decreased $6.88 per share in the third quarter of 2025 versus a $6.71 per share decrease in the third quarter of 2024. Although the Company's common stock decrease was slightly higher in the third quarter of 2025, the number of shares of the Company's common stock in the deferred compensation plans was significantly lower in 2025 versus 2024.
Previous wording
Net income in the first half of 2025 was $31.1 million, or $1.36 per diluted share, versus $23.4 million, or $1.02 per diluted share, in the first half of 2024. Adjusted net income was $31.3 million, or $1.37 per diluted share, versus $24.1 million, or $1.05 per diluted share in the first half of 2024 (see the “Reconciliation of Non-GAAP Adjusted Net Income and Diluted Earnings per Share” section of this MD&A for a reconciliation between reported net income and reported earnings per diluted share and non-GAAP adjusted net income and adjusted earnings per diluted share). Earnings before interest, taxes, depreciation and amortization (EBITDA) were $108.6 million in the first half of 2025, up 11 percent, versus $98.0 million in the first half of 2024. Adjusted EBITDA was $108.9 million, up 10 percent, versus $98.9 million in the first half of 2024 (see the "Reconciliation of non-GAAP EBITDA and Adjusted EBITDA" section of this MD&A for a reconciliation between reported operating income and non-GAAP EBITDA and Adjusted EBITDA). Below is a summary discussion of the major factors leading to the changes in net sales, expenses and income in the first half of 2025 compared to the first half of 2024. A detailed discussion of segment operating performance for the first half of 2025, compared to the first half of 2024, follows the summary.
Current wording
Net income in the first nine months of 2025 was $41.9 million, or $1.83 per diluted share, versus $47.0 million, or $2.05 per diluted share, in the first nine months of 2024. Adjusted net income was $42.2 million, or $1.84 per diluted share, versus $47.7 million, or $2.08 per diluted share in the first nine months of 2024 (see the “Reconciliation of Non-GAAP Adjusted Net Income and Diluted Earnings per Share” section of this MD&A for a reconciliation between reported net income and reported earnings per diluted share and non-GAAP adjusted net income and adjusted earnings per diluted share). Earnings before interest, taxes, depreciation and amortization (EBITDA) were $164.7 million in the first nine months of 2025, up nine percent, versus $151.0 million in the first nine months of 2024. Adjusted EBITDA was $165.1 million, up nine percent, versus $151.9 million in the first nine months of 2024 (see the "Reconciliation of non-GAAP EBITDA and Adjusted EBITDA" section of this MD&A for a reconciliation between reported operating income and non-GAAP EBITDA and Adjusted EBITDA). Below is a summary discussion of the major factors leading to the changes in net sales, expenses and income in the first nine months of 2025 compared to the first nine months of 2024. A detailed discussion of segment operating performance for the first nine months of 2025, compared to the first nine months of 2024, follows the summary.
Previous wording
Consolidated net sales increased $80.1 million, or seven percent, year-over-year. Higher average selling prices favorably impacted the year-over-year change in net sales by $72.9 million. The increase in average selling prices was mainly attributable to the pass-through of higher raw material costs and more favorable product mix. Consolidated sales volume increased two percent, which positively impacted the change in net sales by $27.4 million. Surfactant, Polymer and Specialty Products sales volumes increased one percent, seven percent and eight percent, respectively, year-over-year. Foreign currency translation negatively impacted the year-over-year change in net sales by $20.2 million, primarily due to a stronger U.S. dollar against the Mexican peso and Brazilian real.
Current wording
Consolidated net sales increased $123.6 million, or seven percent, year-over-year. Higher average selling prices favorably impacted the year-over-year change in net sales by $103.7 million. The increase in average selling prices was mainly attributable to the pass-through of higher raw material costs and more favorable product mix. Consolidated sales volume increased two percent, which positively impacted the change in net sales by $31.5 million. Polymer and Specialty Products sales volume increased eight and 14 percent, respectively, year-over-year. Surfactants sales volume was flat year-over-year. Foreign currency translation negatively impacted the year-over-year change in net sales by $11.6 million, primarily due to a stronger U.S. dollar against the Mexican peso and Brazilian real.
Previous wording
Operating income in the first half of 2025 increased $7.4 million, or 19 percent, versus operating income in the first half of 2024. Polymer operating income increased $3.2 million year-over-year. Surfactant and Specialty Products operating income decreased $0.8 million each, year-over-year. Corporate expenses, including environmental remediation and deferred compensation expenses decreased $5.9 million, or 16 percent, year-over-year. Corporate expenses, excluding environmental remediation and deferred compensation expenses, decreased $3.5 million, or 10 percent, year-over-year. Foreign currency translation had a $2.0 million unfavorable impact on operating income year-over-year.
Current wording
Operating income for the first nine months of 2025 increased $5.3 million, or eight percent, versus operating income in the first nine months of 2024. Polymer and Specialty Products operating income increased $2.1 million and $5.1 million, respectively, year-over-year. Surfactant operating income decreased $11.4 million year-over-year. Corporate expenses, including environmental remediation and deferred compensation expenses, decreased $9.6 million, or 16 percent, year-over-year. Corporate expenses, excluding environmental remediation and deferred compensation expenses, decreased $7.3 million, or 13 percent, year-over-year. The decrease in corporate expenses is primarily due to the non-recurrence of prior year charges associated with an external criminal social engineering fraud event. Foreign currency translation had a $1.5 million unfavorable impact on operating income year-over-year.
Previous wording
Operating expenses (including deferred compensation) were essentially flat between years. Changes in the individual income statement line items that comprise the Company’s operating expenses were as follows:
Current wording
Operating expenses (including deferred compensation) decreased two percent year-over-year. Changes in the individual income statement line items that comprise the Company’s operating expenses were as follows:
Previous wording
Selling expenses increased $3.5 million, or 15 percent, largely due to a $1.1 million USEPA penalty associated with certain of the Company's biocide products sold by a licensed distributor. Higher incentive-based compensation and bad debt provision expenses also contributed to this increase.
Current wording
Selling expenses increased $3.5 million, or 10 percent, largely due to higher salaries, higher bad debt provision expense and a USEPA penalty, associated with certain of the Company's biocide products sold by a licensed distributor, recognized in the second quarter of 2025.
Previous wording
Research, development and technical service (R&D) expenses increased $1.0 million, or four percent primarily due to higher salaries and incentive-based compensation expenses.
Current wording
Research, development and technical service (R&D) expenses increased $1.7 million, or four percent, primarily due to higher salaries.
Previous wording
Deferred compensation was $0.8 million of expense in the first half of 2025 versus $2.2 million of expense in the first half of 2024. The $1.4 million year-over-year decrease in deferred compensation expense primarily reflects a smaller increase in the market value of mutual fund investment assets during the first half of 2025 versus the prior year. See the Overview and Segment Results-Corporate Expenses section of this MD&A for further details.
Current wording
Deferred compensation was $1.6 million of expense in the first nine months of 2025 versus $2.7 million of expense in the first nine months of 2024. The $1.1 million year-over-year decrease in deferred compensation expense primarily reflects a smaller increase in the market value of mutual fund investment assets during the first nine months of 2025 versus the prior year. See the Overview and Segment Results-Corporate Expenses section of this MD&A for further details.
Previous wording
Net interest expense for the first half of 2025 increased $3.9 million, or 68 percent, versus the first half of 2024. This increase was primarily attributable to lower U.S. capitalized interest income recognized in 2025 as the Company's new specialty alkoxylation facility in Pasadena, Texas started up in April 2025.
Current wording
Net interest expense for the first nine months of 2025 increased $7.1 million, or 76 percent, versus the first nine months of 2024. This increase was primarily attributable to lower U.S. capitalized interest income recognized in 2025 as the Company's new specialty alkoxylation facility in Pasadena, Texas started up in April 2025.
Previous wording
Other, net was $1.8 million of income in the first half of 2025 versus $3.6 million of income in the first half of 2024. The Company recognized $1.3 million of investment gains (including realized and unrealized gains and losses) for the Company’s deferred compensation and supplemental defined contribution mutual fund assets in the first half of 2025 compared to $3.1 million of investment gains in the first half of 2024. In addition, the Company reported less than $0.1 million of foreign exchange losses in the first half of 2025 versus $0.4 million of foreign exchange losses in the first half of 2024. The Company's net periodic pension income was $0.5 million in the first half of 2025 versus $0.8 million of income in the first half of 2024.
Current wording
Other, net was $3.3 million of income in the first nine months of 2025 versus $4.6 million of income in the first nine months of 2024. The Company recognized $2.4 million of investment gains (including realized and unrealized gains and losses) for the Company’s deferred compensation and supplemental defined contribution mutual fund assets in the first nine months of 2025 compared to $4.2 million of investment gains in the first nine months of 2024. In addition, the Company reported $0.2 million of foreign exchange gains in the first nine months of 2025 versus $0.9 million of foreign exchange losses in the first nine months of 2024. The Company's net periodic pension income was $0.8 million in the first nine months of 2025 versus $1.2 million of income in the first nine months of 2024.
Previous wording
The Company’s effective tax rate was 19.2 percent in the first half of 2025 versus 36.1 percent in the first half of 2024. This decrease was primarily attributable to a favorable tax audit settlement in 2025 combined with the non-recurrence of an unfavorable GILTI-related event in the first half of 2024. These items were partially offset by the expected tax impact of certain cash repatriations to the U.S. In the first six months of 2024, the Company intended to elect bonus depreciation for its new alkoxylation facility in Pasadena, Texas. The Company expected that, as a result of this election, it would lose its ability to use GILTI deduction and related GILTI foreign tax credits for 2024, resulting in a higher effective tax rate than in the first six months of 2025, when the Company did not expect to lose such deduction and foreign tax credits.
Current wording
The Company’s effective tax rate was 23.8 percent in the first nine months of 2025 versus 18.9 percent in the first nine months of 2024. This increase was primarily attributable to a decrease to the Company’s R&D tax credit and the expected tax impact of certain cash repatriations to the U.S..
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Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Gross profit for Asia and Other operations decreased $0.2 million, or eight percent, due to lower average unit margins.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Net sales for Asia and Other operations decreased $1.3 million, or 11 percent, primarily due to an 11 percent decrease in sales volume that negatively impacted the change in net sales by $1.3 million. The lower sales volume reflects lower demand for polyols used in rigid foam applications that was partially offset by a higher demand for specialty polyols resulting from the Company's product diversification efforts.
Previous report — wording carried elsewhere
6.17% with interest to be paid semi-annually. Principal amortization for the Notes is contractually scheduled with equal annual payments beginning on May 21, 2029 and on each May 21 thereafter to and including May 21, 2032, with the final outstanding principal balance due at maturity on May 21, 2033.