STEPAN CO
For the period ended Sep 30, 2026. Filed Nov 4, 2026.
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, 2026 · Filed Nov 4, 2026
SCL$68.09+1.7%Stored close · as of Nov 9, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-08-05.
0001193125-26-334428
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-04.
0001193125-26-447581
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 163 current paragraphs.
66 unchanged; 75 reworded; 21 added; 17 removed; 0 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 (21)
Current report
the Company’s ability to identify suitable acquisition candidates and successfully complete and integrate acquisitions;
Current report
Project Catalyst
Current report
On July 28, 2026, the Company's Board of Directors approved a plan (as part of Project Catalyst) to reduce the Company’s global salaried workforce by around 100 roles, or seven percent of global salaried headcount. These role reductions were completed during the third quarter and the impacted roles were across all Company segments and its Corporate headquarters. The Company estimates that it will incur $4.0 million to $6.0 million of charges in connection with the workforce reduction, consisting primarily of employee severance, benefits and related costs. The Company expects substantially all of these workforce reduction charges to result in cash expenditures. The Company expects to recognize the majority of these charges prior to the end of 2026.
Current report
The Company recognized $5.6 million and $76.1 million of total pre-tax business restructuring expense related to these asset shutdowns and workforce reductions during the third quarter and the first nine months of 2026, respectively. These restructuring expenses are captured on a separate Business Restructuring line item on the Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2026. The Company anticipates recognizing total restructuring expenses in the range of $77.0 million to $80.0 million for full year 2026.
Current report
See Note 16, Business Restructuring, of the notes to the Company's condensed consolidated financial statements (included in Item 1 of this Form 10-Q) for more details about Project Catalyst.
Current report
The Company’s effective tax rate was 10.2 percent in the third quarter of 2026 versus 34.4 percent in the third quarter of 2025. The decrease was primarily due to the forecasted geographical mix of income and provision-to-tax-return adjustments (R&D tax credits and executive compensation limits) quarter-over-quarter.
Current report
Net sales for European operations increased $1.6 million, or two percent, year-over-year. Higher average selling prices positively impacted the change in net sales by $7.3 million and were primarily driven by the pass-through of higher raw material costs and pricing actions. Sales volume decreased six percent and negatively impacted the change in net sales by $4.8 million. The lower sales volume was primarily due to lower demand for products sold into the crop productivity end markets. Foreign currency translation had a $0.9 million unfavorable impact on the year-over-year change in net sales. A stronger U.S. dollar relative to the European euro and British pound sterling led to the unfavorable foreign currency translation effect.
Current report
Surfactant operating income for the third quarter of 2026 increased $11.7 million, or 75 percent, versus operating income for the third quarter of 2025. Gross profit increased $14.7 million, or 37 percent, and operating expenses increased $2.9 million, or 12 percent. Comparisons of gross profit by region and total segment operating expenses and operating income follow:
Current report
Gross profit for European operations increased $0.2 million, or 2 percent, primarily due to higher average unit margins. The higher average unit margins positively impacted the change in gross profit by $0.8 million. The six percent decrease in sales volume and the unfavorable impact of foreign currency translation negatively impacted the year-over-year change in gross profit by $0.5 million and $0.1 million, respectively.
Current report
Gross profit for Latin American operations increased $3.4 million, or 32 percent. The 21% increase in sales volume, the favorable impact of foreign currency translation and higher average unit margins positively impacted the year-over-year change in gross profit by $2.3 million, $0.8 million and $0.3 million, respectively.
Current report
Polymer net sales for the third quarter of 2026 increased $34.7 million, or 24 percent, versus net sales for the same period of 2025. Higher average selling prices and a three percent increase in sales volume positively impacted the year-over-year change in net sales by $31.3 million and $4.0 million, respectively. Foreign currency translation had a $0.6 million unfavorable impact on the year-over-year change in net sales. A comparison of net sales by region follows:
Current report
Polymer operating income in the third quarter of 2026 increased $0.5 million, or three percent, versus operating income in the third quarter of 2025. Gross profit increased $1.4 million, or seven percent, and operating expenses increased $0.9 million, or 14 percent, year-over-year. Comparisons of gross profit by region and total segment operating expenses and operating income follow:
Current report
Gross profit for North American operations increased $4.0 million year-over-year. The 18% increase in sales volume and higher average unit margins positively impacted the change in gross profit by $2.2 million and $1.8 million, respectively.
Current report
Gross profit for European operations decreased $2.0 million, or 30 percent, versus the third quarter of 2025. This decrease was primarily due to lower average unit margins and the 13 percent decrease in sales volume. These two factors negatively impacted the change in gross profit by $1.1 million and $0.9 million, respectively. The lower unit margins were primarily due to higher expenses associated with regulatory-mandated maintenance turnaround costs, that typically occur every five years, at the Company's site in Germany and higher storage costs related to inventory builds in advance of the plant shutdown.
Current report
Nine Months Ended September 30, 2026 and 2025
Current report
Selling expenses increased $2.7 million, or seven percent, year-over-year primarily due to higher incentive-based compensation expenses in 2026.
Current report
Administrative expenses increased $5.0 million, or eight percent, year-over-year primarily due to higher incentive-based compensation expenses and higher estimated remediation costs related to the Company's Maywood, NJ site.
Current report
Polymers net sales for the first nine months of 2026 increased $33.9 million, or seven percent, versus net sales for the same period of 2025. Higher average selling prices positively impacted the year-over-year change in net sales by $26.6 million. Sales volume increased slightly and positively impacted the change in net sales by $1.6 million. Foreign currency translation positively impacted the change in net sales by $5.7 million. A comparison of net sales by region follows:
Current report
Gross profit for European operations decreased $5.1 million, or 22 percent, versus the first nine months of 2025. This decrease was primarily due to lower average unit margins and the 12 percent decrease in sales volume. These items negatively impacted the year-over-year change in gross profit by $2.8 million each. The lower unit margins were primarily due to higher expenses associated with regulatory-mandated maintenance turnaround costs, that typically occur every five years, at the Company's site in Germany and higher storage costs related to inventory builds in advance of the plant shutdown. Foreign currency translation positively impacted the change in gross profit by $0.5 million.
Current report
Gross profit for Asia and Other operations decreased $1.1 million, or 16 percent, year-over-year. This decrease was primarily due to lower average unit margins and the 10 percent decrease in sales volume. These items negatively impacted the change in gross profit by $0.8 million and $0.6 million, respectively. Foreign currency translation positively impacted the change in gross profit by $0.3 million.
Current report
Deferred compensation expense was $2.0 million in the first nine months of 2026 versus $1.6 during the first nine months of 2025. This $0.4 million increase was primarily due to a $15.02 per share increase in the market price of the Company's common stock during the first nine months of 2026 versus a $17.00 per share decrease in the market price during the first nine months of 2025. A smaller increase in the market value of mutual fund investment assets during the first nine months of 2026 versus the first nine months of 2025 partially offset the above.
Removed paragraphs (17)
Previous report
the Company’s ability to make acquisitions of suitable candidates and successfully integrate acquisitions;
Previous report
The Company’s effective tax rate was 29.6 percent in the second quarter of 2026 versus 17.7 percent in the second quarter of 2025. The increase was primarily driven by a decrease in tax credit due to lower qualifying expenses associated with certain start-up costs which did not recur in 2026, and the non-recurrence of interest income recorded in Q2 2025 related to an audit settlement.
Previous report
Gross profit for Latin American operations increased $10.1 million, or 92 percent. Higher average unit margins, the favorable impact of foreign currency translation and the 13 percent increase in sales volume favorably impacted the year-over-year change in gross profit by $6.3 million, $2.4 million and $1.4 million, respectively. The higher average unit margins largely reflect more favorable product mix.
Previous report
Polymer operating income in the second quarter of 2026 increased $5.3 million, or 31 percent, versus operating income in the second quarter of 2025. Gross profit increased $6.2 million, or 25 percent, and operating expenses increased $0.8 million, or 11 percent, year-over-year. Comparisons of gross profit by region and total segment operating expenses and operating income follow:
Previous report
Gross profit for North American operations increased $5.5 million year-over-year. Higher average unit margins and the 15 percent increase in sales volume positively impacted the change in gross profit by $3.5 million and $2.0 million, respectively.
Previous report
Gross profit for European operations increased $0.9 million, or 10 percent, versus the second quarter of 2025. This increase was primarily due to higher average unit margins and the favorable impact of the foreign currency translation. These two factors positively impacted the change in gross profit by $1.0 million and $0.2 million, respectively. The three percent decrease in sales volume negatively impacted the year-over-year change in net sales by $0.3 million.
Previous report
Gross profit for Asia and Other operations decreased $0.2 million, or 10 percent, primarily due to the 16 percent decrease in sales volume. The decrease in sales volume negatively impacted the year-over-year change in gross profit by $0.3 million. Foreign currency translation positively impacted the change in gross profit by $0.1 million.
Previous report
Six Months Ended June 30, 2026 and 2025
Previous report
Selling expenses increased $0.3 million, or one percent, year-over-year.
Previous report
Administrative expenses increased $1.3 million, or three percent, year-over-year primarily due to higher incentive-based compensation expenses.
Previous report
Net sales for European operations increased $19.9 million, or 13 percent, due to the favorable impact of foreign currency translation, higher average selling prices and a three percent increase in sales volume. These items positively impacted the change in net sales by $10.1 million, $5.6 million and $4.2 million, respectively. A weaker U.S. dollar relative to the European euro and British pound sterling led to the favorable foreign currency translation effect. The higher average selling prices were primarily due to the pass-through of higher raw material costs and pricing actions. The higher sales volume was primarily due to higher demand for products sold into the commodity laundry and cleaning end markets.
Previous report
Surfactant operating income for the first half of 2026 increased $10.6 million, or 25 percent, versus operating income for the first half of 2025. Gross profit increased $12.8 million, or 14 percent, and operating expenses increased $2.2 million, or four percent. Comparisons of gross profit by region and total segment operating expenses and operating income follow:
Previous report
Gross profit for European operations increased $2.6 million, or 14 percent, due to the favorable impact of foreign currency translation, higher average unit margins and the three percent increase in sales volume. These items positively impacted the year-over-year change in gross profit by $1.4 million, $0.7 million and $0.5 million, respectively.
Previous report
Polymers net sales for the first half of 2026 decreased $0.8 million, or less than one percent, versus net sales for the same period of 2025. Lower average selling prices negatively impacted the year-over-year change in net sales by $4.7 million. A one percent decrease in sales volume negatively impacted the change in net sales by $2.4 million. Foreign currency translation positively impacted the change in net sales by $6.3 million. A comparison of net sales by region follows:
Previous report
Net sales for Asia and Other operations decreased $1.2 million, or five percent, primarily due to a nine percent decrease in sales volume and lower average selling prices. These items negatively impacted the year-over-year change in net sales by $2.1 million and $0.3 million, respectively. Foreign currency translation favorably impacted the change in net sales by $1.2 million.
Previous report
Gross profit for European operations decreased $3.1 million, or 18 percent, versus the first half of 2025. This decrease was primarily due to the 11 percent decrease in sales volume and lower average unit margins. These items negatively impacted the year-over-year change in gross profit by $1.9 million and $1.7 million, respectively. Foreign currency translation positively impacted the change in gross profit by $0.5 million.
Previous report
Deferred compensation expense increased $1.2 million year-over-year and was primarily due to an $8.36 per share increase in the market price of the Company's common stock during the first six months of 2026 versus a $10.12 per share decrease in the market price during the first six months of 2025.
Reworded paragraphs (75)
Previous wording
the Company’s ability to keep and protect its intellectual property rights;
Current wording
the Company’s ability to maintain and protect its intellectual property rights;
Previous wording
Surfactants – Surfactants, which accounted for 73 percent of consolidated net sales for the first six months of 2026, 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 one Asian site (Singapore).
Current wording
Surfactants – Surfactants, which accounted for 71 percent of consolidated net sales for the first nine months of 2026, 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 one Asian site (Singapore).
Previous wording
Polymers – Polymers, which accounted for 24 percent of consolidated net sales for the first six months of 2026, 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 2026, 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 2026, 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 four percent of consolidated net sales for the first nine months of 2026, 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
In February 2026, the Company announced Project Catalyst, a comprehensive operational and efficiency plan. As part of Project Catalyst, the Board of Directors approved plans to shut down the Company's Fieldsboro, New Jersey site and decommission select assets at its Elwood, Illinois (Millsdale) and Stalybridge, U.K. facilities during the first half of 2026. The Company is mostly consolidating impacted operations into its existing network, improving its asset utilization and reducing its fixed cost basis, while maintaining ongoing supply for its customers. The Company recognized $5.1 million and $70.5 million of pre-tax business restructuring expense related to these asset shutdowns during the second quarter and the first six months of 2026, respectively. This restructuring expense is captured on a separate Business Restructuring line item on the Condensed Consolidated Statements of Income for the three and six months ended June 30, 2026. See Note 16, Business Restructuring, of the notes to the Company's consolidated financial statements for more details.
Current wording
In February 2026, the Company announced Project Catalyst, a comprehensive operational and efficiency plan. As part of Project Catalyst, the Board of Directors approved plans to shut down the Company's Fieldsboro, New Jersey site and decommission select assets at its Elwood, Illinois (Millsdale) and Stalybridge, U.K. facilities during the first half of 2026. Each of these footprint initiatives impacted assets within the Surfactant segment. The Company is mostly consolidating impacted operations into its existing network, improving its asset utilization and reducing its fixed cost basis, while maintaining ongoing supply for its customers.
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, 2026 and 2025:
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, 2026 and 2025:
Previous wording
Net income in the second quarter of 2026 was $22.9 million, or $1.00 per diluted share, versus $11.3 million, or $0.50 per diluted share, in the second quarter of 2025. Adjusted net income was $27.1 million, or $1.18 per diluted share, versus $12.0 million, or $0.52 per diluted share in the second quarter of 2025 (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 (loss) and reported earnings (loss) per diluted share and non-GAAP adjusted net income and adjusted earnings per diluted share). Earnings before interest, taxes, depreciation and amortization (EBITDA) were $69.1 million in the second quarter of 2026, up 37 percent, versus $50.6 million in the second quarter of 2025. Adjusted EBITDA was $74.4 million, up 45 percent, versus $51.4 million in the second quarter of 2025 (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 2026 compared to the second quarter of 2025. A detailed discussion of segment operating performance for the second quarter of 2026, compared to the second quarter of 2025, follows the summary.
Current wording
Net income in the third quarter of 2026 was $17.8 million, or $0.78 per diluted share, versus $10.8 million, or $0.47 per diluted share, in the third quarter of 2025. Adjusted net income was $21.7 million, or $0.94 per diluted share, versus $10.9 million, or $0.48 per diluted share in the third quarter of 2025 (see the “Reconciliations of Non-GAAP Adjusted Net Income and Diluted Earnings per Share” section of this MD&A for a reconciliation between reported net income (loss) and reported earnings (loss) per diluted share and non-GAAP adjusted net income and adjusted earnings per diluted share). Earnings before interest, taxes, depreciation and amortization (EBITDA) were $57.5 million in the third quarter of 2026, up two percent, versus $56.1 million in the third quarter of 2025. Adjusted EBITDA was $66.3 million, up 18 percent, versus $56.2 million in the third quarter of 2025 (see the "Reconciliations of Non-GAAP EBITDA and Adjusted EBITDA" section of this MD&A for a reconciliation between reported net 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 2026 compared to the third quarter of 2025. A detailed discussion of segment operating performance for the third quarter of 2026, compared to the third quarter of 2025, follows the summary.
Previous wording
Consolidated net sales increased $89.4 million, or 15 percent, year-over-year. Higher average selling prices favorably impacted the year-over-year change in net sales by $54.4 million. The increase in average selling prices was mostly attributable to the pass-through of higher raw material costs, more favorable product mix, and pricing actions. Consolidated sales volume increased three percent and positively impacted the change in net sales by $17.9 million. Surfactant, Polymer and Specialty Products sales volume increased two, five and four percent, respectively, year-over-year. Organic sales volume (excluding the divestiture of assets in the Philippines and the exit of a product line in the UK) increased six percent year-over-year. Foreign currency translation positively impacted the year-over-year change in net sales by $17.1 million, primarily due to a weaker U.S. dollar against most of the currencies in locations where the Company conducts its business.
Current wording
Consolidated net sales increased $101.9 million, or 17 percent, year-over-year. Higher average selling prices favorably impacted the year-over-year change in net sales by $76.8 million. The increase in average selling prices was mostly attributable to the pass-through of higher raw material costs and pricing actions. Consolidated sales volume increased three percent and positively impacted the change in net sales by $16.6 million. Surfactant and Polymer sales volume increased three percent each and Specialty Products sales volume increased 20 percent, year-over-year. Organic sales volume (excluding the divestiture of assets in the Philippines and the exit of a product line in the U.K.) increased seven percent year-over-year. Foreign currency translation positively impacted the year-over-year change in net sales by $8.5 million, primarily due to a weaker U.S. dollar against the currencies in Latin American countries where the Company conducts its business.
Previous wording
Operating income in the second quarter of 2026 increased $19.2 million, or 107 percent, versus operating income in the second quarter of 2025. Surfactant and Polymer operating income increased $21.0 million and $5.3 million, respectively, year-over-year. Specialty Products operating income decreased $0.3 million versus the second quarter of 2025. Corporate expenses, including business restructuring, environmental remediation and deferred compensation expenses increased $6.8 million, year-over-year. Business restructuring expenses were $5.1 million in the second quarter of 2026 versus no restructuring expenses recognized during the second quarter of 2025. Foreign currency translation had a $2.1 million positive impact on operating income year-over-year.
Current wording
Operating income in the third quarter of 2026 increased $4.2 million, or 19 percent, versus operating income in the third quarter of 2025. Surfactant, Polymer and Specialty Products operating income increased $11.7 million, $0.5 million and $0.6 million, respectively, year-over-year. Corporate expenses, including business restructuring, environmental remediation and deferred compensation expenses increased $8.6 million, year-over-year. Business restructuring expenses were $5.6 million in the third quarter of 2026 versus no restructuring expenses recognized during the third quarter of 2025. Foreign currency translation had a $0.4 million positive impact on operating income year-over-year.
Previous wording
Operating expenses (including deferred compensation) increased $3.7 million, or seven 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 (excluding business restructuring) increased $6.8 million, or 14 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 were up one percent year-over-year. Higher incentive-based compensation expenses were mostly offset by the non-recurrence of a USEPA penalty recognized in 2025.
Current wording
Selling expenses were up $2.4 million, or 21 percent, primarily due to higher incentive-based compensation expenses and the non-recurrence of USEPA penalty recoveries from third parties in 2025.
Previous wording
Administrative expenses were up $1.4 million, or six percent, primarily due to higher incentive-based compensation expenses.
Current wording
Administrative expenses were up $3.7 million, or 16 percent, primarily due to higher incentive-based compensation expenses and higher estimated remediation costs related to the Company's Maywood, NJ site.
Previous wording
Research, development and technical service (R&D) expenses increased $2.8 million, or 10 percent primarily due to higher incentive-based compensation expenses.
Current wording
Research, development and technical service (R&D) expenses increased $1.4 million, or 10 percent, primarily due to higher incentive-based compensation expenses.
Previous wording
Deferred compensation was $1.4 million of expense in the second quarter of 2026 versus $1.8 million of expense in the prior year quarter. The $0.4 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 second quarter of 2026 versus the second quarter of 2025. See the Overview and Segment Results-Corporate Expenses section of this MD&A for further details.
Current wording
Deferred compensation was less than $0.1 million of expense in the third quarter of 2026 versus $0.8 million of expense in the prior year quarter. The $0.7 million decrease in deferred compensation expense primarily reflects a smaller increase in the market value of mutual fund investment assets during the third quarter of 2026 versus the third quarter of 2025. 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 2026 increased $0.2 million, or four percent, versus the second quarter of 2025.
Current wording
Net interest expense for the third quarter of 2026 decreased $0.5 million, or seven percent, versus the third quarter of 2025.
Previous wording
Other, net was $1.0 million of income in the second quarter of 2026 versus $1.3 million of income in the second quarter of 2025. The Company recognized $1.4 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 second quarter of 2026 compared to $1.7 million of investment gains in the second quarter of 2025. In addition, the Company reported $0.4 million of foreign exchange losses in the second quarter of 2026 versus $0.6 million of foreign exchange losses in the second quarter of 2025. The Company's net periodic pension income was less than $0.1 million of income in the second quarter of 2026 versus $0.3 million of income in the second quarter of 2025.
Current wording
Other, net was $0.2 million of income in the third quarter of 2026 versus $1.5 million of income in the third quarter of 2025. The Company recognized less than $0.1 million of investment losses (including realized and unrealized gains and losses) for the Company’s deferred compensation and supplemental defined contribution mutual fund assets in the third quarter of 2026 compared to $1.1 million of investment gains in the third quarter of 2025. In addition, the Company reported $0.2 million of foreign exchange gains in both the third quarter of 2026 and 2025. The Company's net periodic pension income was less than $0.1 million of income in the third quarter of 2026 versus $0.3 million of income in the third quarter of 2025.
Previous wording
Surfactant net sales for the second quarter of 2026 increased $72.4 million, or 18 percent, versus net sales for the second quarter of 2025. Higher average selling prices had a $47.3 million favorable impact on the change in net sales. The higher average selling prices were mainly attributable to the pass through of higher raw material costs, more favorable product mix and pricing actions. Sales volume increased two percent and had a $9.9 million favorable impact on the change in net sales. Organic sales volume increased seven percent year-over-year. The Company believes a portion of the volume growth reflects customer pre-buying in response to geopolitical and product supply uncertainty. Foreign currency translation had a $15.2 million favorable 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 2026 increased $64.3 million, or 15 percent, versus net sales for the third quarter of 2025. Higher average selling prices had a $44.0 million favorable impact on the change in net sales. The higher average selling prices were mainly attributable to the pass through of higher raw material costs and pricing actions. Sales volume increased three percent and had an $11.2 million favorable impact on the change in net sales. Organic sales volume (excluding the divestiture of assets in the Philippines and the exit of a product line in the U.K.) increased eight percent year-over-year. Foreign currency translation had a $9.1 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 $39.4 million, or 17 percent, year-over-year. Higher average selling prices positively impacted the change in net sales by $30.9 million and were primarily due to the pass-through of higher raw material costs, more favorable product mix and pricing actions. Sales volume increased four percent and positively impacted the change in net sales by $8.5 million. The higher sales volume was primarily due to higher demand for products sold into the industrial cleaning and oilfield end markets.
Current wording
Net sales for North American operations increased $34.6 million, or 15 percent, year-over-year. Higher average selling prices positively impacted the change in net sales by $26.3 million and were primarily due to the pass-through of higher raw material costs, more favorable product mix and pricing actions. Sales volume increased four percent and positively impacted the change in net sales by $8.4 million. The higher sales volume was primarily due to higher demand for products sold into the consumer products and oilfield end markets and to our Tier 2/3 customer base. Foreign currency translation had a $0.1 million unfavorable impact on the year-over-year change in net sales.
Previous wording
Net sales for Latin American operations increased $46.8 million, or 27 percent, due to the favorable impact of foreign currency translation, a nine percent increase in sales volume and higher average selling prices. These items positively impacted the change in net sales by $25.2 million, $15.6 million and $6.0 million, respectively. A weaker U.S. dollar relative to all currencies within the region led to the favorable foreign currency translation effect. The increase in sales volume was primarily due to higher demand for products sold into the commodity laundry and cleaning, industrial cleaning and crop productivity end markets and to our distribution partners. The higher average selling prices were primarily due to the pass-through of higher raw material costs, more favorable product mix and pricing actions.
Current wording
Net sales for Latin American operations increased $38.8 million, or 39 percent, due to a 21% increase in sales volume, the favorable impact of foreign currency translation and higher average selling prices. These items positively impacted the change in net sales by $21.1 million, $10.1 million, and $7.6 million, respectively. The increase in sales volume was primarily due to higher demand for products sold into the consumer products and oilfield end markets and to our distribution partners. A weaker U.S. dollar relative to all currencies within the region led to the favorable foreign currency translation effect. The higher average selling prices were primarily due to the pass-through of higher raw material costs and pricing actions.
Previous wording
Net sales for Asian operations decreased $7.2 million, or 61 percent, versus the prior year quarter. A 76 percent decrease in sales volume negatively impacted the year-over-year change in net sales by $9.1 million. The lower sales volume was mainly due to the divestiture of assets in the Philippines during the fourth quarter of 2025. Higher average selling prices positively impacted the change in net sales by $1.8 million. Foreign currency translation had a $0.1 million favorable impact on the change in net sales year-over-year.
Current wording
Net sales for Asian operations decreased $10.7 million, or 66 percent, versus the prior year quarter. An 80 percent decrease in sales volume negatively impacted the year-over-year change in net sales by $13.0 million. The lower sales volume was mainly due to the divestiture of assets in the Philippines during the fourth quarter of 2025. Higher average selling prices positively impacted the change in net sales by $2.2 million. Foreign currency translation had a $0.1 million favorable impact on the change in net sales year-over-year.
Previous wording
Gross profit for North American operations increased $11.0 million, or 57 percent, versus the prior year primarily due to higher average unit margins. The higher average unit margins favorably impacted the change in gross profit by $10.3 million and were attributable to more favorable product mix, pricing actions, the initial benefits from Project Catalyst actions and the non-recurrence of an environmental remediation reserve adjustment recognized in the second quarter of 2025. The four percent increase in sales volume positively impacted the year-over-year change in gross profit by $0.7 million.
Current wording
Gross profit for North American operations increased $11.3 million, or 58 percent, versus the prior year primarily due to higher average unit margins. The higher average unit margins favorably impacted the change in gross profit by $10.6 million and were primarily attributable to favorable pricing actions, tariff refunds and benefits from Project Catalyst actions. The four percent increase in sales volume positively impacted the year-over-year change in gross profit by $0.7 million.
Previous wording
Gross profit for Asia operations decreased $0.2 million year-over-year primarily due to the double-digit decrease in sales volume resulting from the asset divestiture in the Philippines during the fourth quarter of 2025. The decline in sales volume negatively impacted the year-over-year change in gross profit by $1.8 million but was largely offset by higher average unit margins. The higher average unit margins positively impacted the change in gross profit by $1.6 million and largely reflect lower overhead expenses resulting from production timing differences.
Current wording
Gross profit for Asia operations decreased $0.2 million, or eight percent, year-over-year primarily due to the double-digit decrease in sales volume resulting from the asset divestiture in the Philippines during the fourth quarter of 2025. The decline in sales volume negatively impacted the year-over-year change in gross profit by $1.5 million but was largely offset by higher average unit margins. The higher average unit margins positively impacted the change in gross profit by $1.3 million and primarily reflect lower overhead expenses, partially due to production timing differences, and more favorable product mix.
Previous wording
Operating expenses for the Surfactants segment increased $1.8 million, or seven percent, in the second quarter of 2026 versus the second quarter of 2025. This increase was largely due to higher incentive-based compensation expenses that were partially offset by the non-recurrence of a $1.1 million USEPA penalty recognized in the second quarter of 2025. In addition, foreign currency translation had a $0.7 million unfavorable impact on the year-over-year change in operating expenses.
Current wording
Operating expenses for the Surfactants segment increased $3.0 million, or 12 percent, in the third quarter of 2026 versus the third quarter of 2025. This increase was largely due to higher incentive-based compensation expenses and the non-recurrence of USEPA penalty recoveries from third parties in the third quarter of 2025. In addition, foreign currency translation had a $0.3 million unfavorable impact on the year-over-year change in operating expenses.
Previous wording
Net sales for North American operations increased $11.0 million, or 12 percent, year-over-year. Sales volume increased 15 percent and positively impacted the year-over-year change in net sales by $13.0 million. Sales volume of polyols used in rigid foam applications and within the commodity phthalic anhydride business increased 19 percent and 12 percent, respectively. Within rigid applications, spray foam sales increased triple digits. Lower average selling prices negatively impacted the change in net sales by $2.0 million.
Current wording
Net sales for North American operations increased $26.9 million, or 34 percent, year-over-year. Sales volume increased 18 percent and positively impacted the year-over-year change in net sales by $14.1 million. Sales volume of polyols used in rigid foam applications and within the commodity phthalic anhydride business increased 23 percent and 15 percent, respectively, year-over-year. Within rigid applications, spray foam sales volume increased by double digits. Higher average selling prices positively impacted the change in net sales by $12.8 million. The higher average selling prices were primarily due to the pass-through of higher raw material costs, more favorable product mix and pricing actions.
Previous wording
Net sales for European operations increased $4.0 million, or six percent, year-over-year. Higher average selling prices and the favorable impact of foreign currency translation positively impacted the year-over-year change in net sales by $5.0 million and $1.2 million, respectively. The higher average selling prices were mainly attributable to the pass through of higher raw material costs. A weaker U.S. dollar relative to the Polish zloty and British pound sterling led to the favorable foreign currency translation effect. A three percent decrease in sales volume negatively impacted the year-over-year change in net sales by $2.2 million. The lower sales volume reflects lower construction demand related to the macroeconomic environment and economic uncertainties.
Current wording
Net sales for European operations increased $5.8 million, or 11 percent, year-over-year. Higher average selling prices positively impacted the year-over-year change in net sales by $14.3 million. The higher average selling prices were mainly attributable to the pass through of higher raw material costs. A 13 percent decrease in sales volume and the unfavorable impact of foreign currency translation negatively impacted the year-over-year change in net sales by $7.2 million and $1.3 million, respectively. The lower sales volume reflects lower construction demand largely related to the macroeconomic environment and the ongoing economic uncertainties. A stronger U.S. dollar relative to the Polish zloty and British pound sterling led to the unfavorable foreign currency translation effect.
Previous wording
Net sales for Asia and Other operations increased $0.3 million, or two 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 $1.4 million and $0.7 million, respectively. A 16 percent decrease in sales volume negatively impacted the year-over-year change in net sales by $1.8 million.
Current wording
Net sales for Asia and Other operations increased $2.0 million, or 18 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 $2.5 million and $0.7 million, respectively. An 11 percent decrease in sales volume negatively impacted the year-over-year change in net sales by $1.2 million.
Previous wording
Gross profit for Asia and Other operations decreased $0.5 million, or 11 percent, year-over year. This decrease was primarily due to the nine percent decrease in sales volume and lower average unit margins. These items negatively impacted the change in gross profit by $0.4 million and $0.3 million, respectively. Foreign currency translation positively impacted the change in gross profit by $0.2 million.
Current wording
Gross profit for Asia and Other operations decreased $0.6 million, or 29 percent, primarily due to lower average unit margins and the 11 percent decrease in sales volume. These items negatively impacted the year-over-year change in gross profit by $0.4 million and $0.2 million, respectively. Foreign currency translation positively impacted the change in gross profit by $0.1 million.
Previous wording
Operating expenses for the Polymer segment increased $0.8 million, or 11 percent, in the second quarter of 2026 versus the second quarter of 2025 primarily due to higher incentive-based compensation expenses.
Current wording
Operating expenses for the Polymer segment increased $0.9 million, or 14 percent, in the third quarter of 2026 versus the third quarter of 2025 primarily due to higher incentive-based compensation expenses.
Previous wording
Specialty Products net sales for the second quarter of 2026 increased $1.7 million, or eight percent, versus net sales for the second quarter of 2025. Gross profit and operating income decreased $0.2 million and $0.3 million, respectively, year-over-year. The year-over-year decreases in gross profit and operating income were primarily due to less favorable product mix within the medium chain triglycerides (MCT) product line that was mostly offset by higher earnings in the food and flavor business.
Current wording
Specialty Products net sales for the third quarter of 2026 increased $2.9 million, or 12 percent, versus net sales for the third quarter of 2025. Gross profit and operating income both increased $0.6 million, respectively, year-over-year. The year-over-year increases in gross profit and operating income were primarily due to higher sales volume within the medium chain triglycerides (MCT) product line that was partially offset by less favorable product mix.
Previous wording
Corporate expenses, which include business restructuring, deferred compensation and other operating expenses that are not allocated to the reportable segments, increased $6.8 million year-over-year. Corporate expenses were $24.6 million in the second quarter of 2026 versus $17.8 million in the second quarter of 2025. This increase was primarily due to a $5.1 million restructuring charge recognized in the second quarter of 2026 and higher year-over-year incentive-based compensation expenses. See Note 16, Business Restructuring, of the notes to the Company's consolidated financial statements for more details regarding the restructuring charge. These items were partially offset by a $0.4 million year-over-year decrease in deferred compensation expenses and a $0.6 million decrease in legacy environmental reserve expenses.
Current wording
Corporate expenses, which include business restructuring, deferred compensation and other operating expenses that are not allocated to the reportable segments, increased $8.6 million year-over-year. Corporate expenses were $26.2 million in the third quarter of 2026 versus $17.7 million in the third quarter of 2025. This increase was primarily due to a $5.6 million restructuring charge recognized in the third quarter of 2026, higher estimated remediation costs related to the Company's Maywood, NJ site and higher year-over-year incentive-based compensation expenses. See Note 16, Business Restructuring, of the notes to the Company's condensed consolidated financial statements (included in Item 1 of this Form 10-Q) for more details regarding the restructuring charge.
Previous wording
The $0.4 million decrease in deferred compensation expense was primarily due to a smaller increase in the market value of mutual fund investment assets during the second quarter of 2026 versus the second quarter of 2025. Partially offsetting the above, the market price of the Company's common stock increased $5.74 per share in the second quarter of 2026 versus a $0.46 per share decrease in the second quarter of 2025.
Current wording
Deferred compensation expense decreased $0.8 million year-over-year. This decrease was primarily due to a smaller increase in the market value of mutual fund investment assets during the third quarter of 2026 versus the third quarter of 2025. Partially offsetting the above, the market price of the Company's common stock increased $6.67 per share in the third quarter of 2026 versus a $6.88 per share decrease in the third quarter of 2025.
Previous wording
The Company incurred an $18.5 million net loss in the first half of 2026, or a loss of $0.81 per diluted share, versus net income of $31.1 million, or $1.36 income per diluted share, in the first half of 2025. The current year loss resulted from $55.2 million of after-tax restructuring charges recognized in 2026. Adjusted net income was $37.4 million, or $1.63 per diluted share, versus $31.3 million, or $1.37 per diluted share in the first half of 2025 (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 (loss) and reported earnings (loss) per diluted share and non-GAAP adjusted net income and adjusted earnings per diluted share). Earnings before interest, taxes, depreciation and amortization (EBITDA) were $52.7 million in the first half of 2026, down 51 percent from $108.6 million in the first half of 2025. Adjusted EBITDA was $124.1 million, up 14 percent, from $108.9 million in the first half of 2025 (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 2026 compared to the first half of 2025. A detailed discussion of segment operating performance for the first half of 2026, compared to the first half of 2025, follows the summary.
Current wording
The Company incurred a $0.7 million net loss in the first nine months of 2026, or a loss of $0.03 per diluted share, versus net income of $41.9 million, or $1.83 income per diluted share, in the first nine months of 2025. The current year loss resulted from $56.6 million of after-tax restructuring charges recognized in 2026. Adjusted net income was $59.1 million, or $2.58 per diluted share, versus $42.2 million, or $1.84 per diluted share in the first nine months of 2025 (see the “Reconciliations of Non-GAAP Adjusted Net Income and Diluted Earnings per Share” section of this MD&A for a reconciliation between reported net income (loss) and reported earnings (loss) per diluted share and non-GAAP adjusted net income and adjusted earnings per diluted share). Earnings before interest, taxes, depreciation and amortization (EBITDA) were $110.1 million in the first nine months of 2026, down 33 percent, from $164.7 million in the first nine months of 2025. Adjusted EBITDA was $190.3 million, up 15 percent, from $165.1 million in the first nine months of 2025 (see the "Reconciliations of Non-GAAP EBITDA and Adjusted EBITDA" section of this MD&A for a reconciliation between reported net 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 2026 compared to the first nine months of 2025. A detailed discussion of segment operating performance for the first nine months of 2026, compared to the first nine months of 2025, follows the summary.
Previous wording
Consolidated net sales increased $100.7 million, or eight percent, year-over-year. Higher average selling prices favorably impacted the year-over-year change in net sales by $56.1 million. The increase in average selling prices was mainly attributable to the pass-through of higher raw material costs, more favorable product mix and pricing actions. Foreign currency translation positively impacted the year-over-year change in net sales by $42.4 million, due to a weaker U.S. dollar against all currencies in the locations that the Company conducts its business. Consolidated sales volume increased less than one percent and positively impacted the change in net sales by $2.2 million. Organic sales volume was up three percent year-over-year.
Current wording
Consolidated net sales increased $202.6 million, or 11 percent, year-over-year. Higher average selling prices favorably impacted the year-over-year change in net sales by $133.3 million. The increase in average selling prices was mainly attributable to the pass-through of higher raw material costs, more favorable product mix and pricing actions. Foreign currency translation positively impacted the year-over-year change in net sales by $51.0 million, primarily due to a weaker U.S. dollar against the currencies in Latin American countries where the Company conducts its business. Consolidated sales volume increased one percent and positively impacted the change in net sales by $18.3 million. Organic sales volume (excluding the divestiture of assets in the Philippines and the exit of a product line in the U.K.) was up four percent year-over-year.
Previous wording
The Company incurred a $12.4 million operating loss in the first half of 2026 versus $46.3 million of operating income in the first half of 2025. Surfactant and Polymer operating income increased $10.6 million and $6.1 million, respectively, year-over-year. Specialty Products operating income decreased $1.0 million between years. Corporate expenses, including business restructuring, environmental remediation and deferred compensation expenses increased $74.3 million, year-over-year. Business restructuring expenses were $70.5 million in the first six months of 2026 versus no restructuring expenses recognized in the first six months of 2025. Foreign currency translation had a $3.4 million favorable impact on operating income year-over-year.
Current wording
Operating income for the first nine months of 2026 was $13.5 million versus $68.0 million of operating income in the first nine months of 2025. Surfactant and Polymer operating income increased $22.3 million and $6.6 million, respectively, year-over-year. Specialty Products operating income decreased $0.5 million between years. Corporate expenses, including business restructuring, environmental remediation and deferred compensation expenses increased $82.9 million, year-over-year. Business restructuring expenses were $76.1 million in the first nine months of 2026 versus no restructuring expenses recognized in the first nine months of 2025. Foreign currency translation had a $3.8 million favorable impact on operating income year-over-year.
Previous wording
Operating expenses (including deferred compensation) increased $5.6 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 (excluding business restructuring) increased $12.4 million or eight percent, year-over-year. Changes in the individual income statement line items that comprise the Company’s operating expenses were as follows:
Previous wording
Research, development and technical service (R&D) expenses increased $2.5 million, or 17 percent primarily due to higher incentive-based compensation expenses.
Current wording
Research, development and technical service (R&D) expenses increased $4.3 million, or 10 percent, primarily due to higher incentive-based compensation expenses.
Previous wording
Deferred compensation was $2.0 million of expense in the first half of 2026 versus $0.8 million of expense in the first half of 2025. The $1.2 million year-over-year increase in deferred compensation expense primarily reflects an $8.36 per share increase in the market price of the Company's common stock during the first six months of 2026 versus a $10.12 per share decrease in the market price during the first six months of 2025. See the Overview and Segment Results-Corporate Expenses section of this MD&A for further details.
Current wording
Deferred compensation was $2.0 million of expense in the first nine months of 2026 versus $1.6 million of expense in the first nine months of 2025. The $0.4 million year-over-year increase in deferred compensation expense reflects a $15.02 per share increase in the market price of the Company's common stock during the first nine months of 2026 versus a $17.00 per share decrease in the market price during the first nine months of 2025. A smaller increase in the market value of mutual fund investment assets during the first nine months of 2026 versus the first nine months of 2025 partially offset the above. 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 2026 increased $1.1 million, or 11 percent, versus the first half of 2025. This increase was primarily attributable to lower U.S. capitalized interest income recognized in 2026 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 2026 increased $0.6 million, or four percent, versus the first nine months of 2025. This increase was primarily attributable to lower U.S. capitalized interest income recognized in 2026 as the Company's new specialty alkoxylation facility in Pasadena, Texas started up in April 2025, partially offset by a combination of lower interest expense and higher interest income in 2026.
Previous wording
Other, net was $1.2 million of income in the first half of 2026 versus $1.8 million of income in the first half of 2025. 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 both the first half of 2026 and 2025. In addition, the Company reported $0.2 million of foreign exchange losses in the first half of 2026 versus less than $0.1 million of foreign exchange losses in the first half of 2025. The Company's net periodic pension income was less than $0.1 million in the first half of 2026 versus $0.5 million in the first half of 2025.
Current wording
Other, net was $1.4 million of income in the first nine months of 2026 versus $3.3 million of income in the first nine months of 2025. 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 nine months of 2026 compared to $2.4 million of investment gains in the first nine months of 2025. In addition, the Company reported less than $0.1 million of foreign exchange gains in the first nine months of 2026 versus $0.2 million of foreign exchange gains in the first nine months of 2025. The Company's net periodic pension income was $0.1 million in the first nine months of 2026 versus $0.8 million in the first nine months of 2025.
Previous wording
The Company’s effective tax rate was 15.7 percent in the first half of 2026 versus 19.2 percent in the first half of 2025. The decrease was primarily attributable to the geographical mix of income partially offset by select uncertain tax positions that did not recur in the first half of 2026. These amounts had a more pronounced impact on the effective tax rate due to the pre-tax loss in the first half of 2026 versus pre-tax income in the first half of 2025.
Current wording
The Company’s effective tax rate was 67.7 percent in the first nine months of 2026 versus 23.8 percent in the first nine months of 2025. The increase was primarily attributable to the geographical mix of income, discrete items and permanent differences. The discrete and permanent items were not significantly different from the prior year but had a pronounced impact on the effective tax rate due to the small global pre-tax loss in 2026.
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Current report — wording carried from elsewhere
On September 25, 2026, the Company entered into a new credit agreement (the Credit Agreement) with a syndicate of banks. The Credit Agreement provides for credit facilities in an initial aggregate principal amount of $500.0 million, consisting of (a) a $350.0 million multi-currency revolving credit facility and (b) a $150.0 million delayed-draw term loan credit facility, each of which matures on September 25, 2031. The Credit Agreement replaced the Company's prior $450.0 million credit agreement entered into on June 24, 2022, consisting of a $350.0 million multi-currency revolving credit facility and a $100.0 million delayed-draw term loan facility. The Credit Agreement provides for an expansion option that will allow the Company, subject to certain requirements, to request an increase to the revolving credit facility or to enter into one or more trances of incremental term loans in an aggregate amount of up to an additional $250.0 million.