Stepan Reports Third Quarter 2026 Results

Year-to-date adjusted net income rose 40%, while restructuring charges pushed reported results into a loss.

Rhea-AI Summary

Stepan (NYSE: SCL) reported third-quarter 2026 net income of $17.8 million, with earnings improving across all three business segments. Net income rose 64% year-over-year, while sales increased 17% to $692.154 million. Adjusted net income rose 98% to $21.7 million. Adjusted EBITDA, a non-GAAP measure of earnings before interest, taxes, depreciation and amortization, increased 18% to $66.3 million. Global sales volume grew 3%; organic volume grew 7%.

Quarterly free cash flow was $8.2 million, constrained by higher working capital requirements. Project Catalyst generated a $5.6 million quarterly restructuring charge. Year-to-date net results swung to a $0.7 million loss, reflecting $76.1 million in pre-tax restructuring charges. An October land sale closed for $28.5 million, with all proceeds designated for debt repayment. Stepan expects full-year adjusted EBITDA growth, positive free cash flow and further debt reduction.

31 points · 0 major

MixediHow this balance works

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Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.

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1 major · 16 points

Hollow bars mark forward-looking points. How the balance works

Positive

• Moderate pointThird-quarter net income increased 64% to $17.8 million year-over-year.
• Moderate pointThird-quarter sales increased 17% to $692.154 million year-over-year.
• Moderate pointThird-quarter adjusted EBITDA increased 18% to $66.3 million year-over-year.
• Moderate point. Forward-looking: it has not happened yet and may not happen.October land sale closed for $28.5 million; all proceeds will repay debt. 1.9% of market cap
• Moderate point. Forward-looking: it has not happened yet and may not happen.Stepan expects 2026 adjusted EBITDA growth, positive free cash flow and continued balance-sheet debt reduction.

26 minor points

• Minor pointThird-quarter diluted earnings increased 66% to $0.78 per share year-over-year.
• Minor pointThird-quarter adjusted net income increased 98% to $21.7 million year-over-year.
• Minor pointThird-quarter adjusted diluted earnings increased 96% to $0.94 per share year-over-year.
• Minor pointThird-quarter operating income increased 19% to $25.959 million year-over-year.
• Minor pointThird-quarter EBITDA increased 2% to $57.5 million year-over-year.
• Minor pointThird-quarter global sales volume grew 3%; organic sales volume grew 7% year-over-year.
• Minor pointThird-quarter operations generated $29.3 million in cash.
• Minor pointYear-to-date sales increased 11% to $1,980.772 million versus the prior-year period.
• Minor pointYear-to-date adjusted net income increased 40% to $59.1 million versus the prior-year period.
• Minor pointYear-to-date adjusted diluted earnings increased 40% to $2.58 per share versus the prior-year period.
• Minor pointYear-to-date adjusted EBITDA increased 15% to $190.3 million versus the prior-year period.
• Minor pointYear-to-date global volume grew 1%; organic volume grew 4% versus the prior-year period.
• Minor pointSurfactant quarterly sales increased 15% to $486.6 million year-over-year.
• Minor pointSurfactant quarterly adjusted EBITDA increased 27% to $48.2 million year-over-year.
• Minor pointSurfactant quarterly global volume grew 3%; organic volume increased 8% year-over-year.
• Minor pointSurfactant year-to-date sales increased 13%; operating income increased 38% versus the prior-year period.
• Minor pointSurfactant year-to-date adjusted EBITDA increased 19% to $144.2 million versus the prior-year period.
• Minor pointPolymer quarterly sales increased 24% to $178.7 million year-over-year.
• Minor pointPolymer quarterly adjusted EBITDA increased 4% to $23.3 million year-over-year.
• Minor pointPolymer quarterly volume increased 3%, with double-digit North American growth.
• Minor pointPolymer year-to-date sales increased 7%; operating income increased 17% versus the prior-year period.
• Minor pointPolymer year-to-date adjusted EBITDA increased 12% to $71.9 million versus the prior-year period.
• Minor pointSpecialty Products quarterly sales increased 12% to $26.9 million year-over-year.
• Minor pointSpecialty Products quarterly volume increased 20% year-over-year.
• Minor pointSpecialty Products quarterly adjusted EBITDA increased 5% to $11.7 million year-over-year.
• Minor pointSpecialty Products year-to-date sales increased 14% to $69.864 million versus the prior-year period.

Negative

• Major pointProject Catalyst restructuring charges totaled $76.1 million pre-tax year-to-date, including $5.6 million in the third quarter. 5.1% of market cap
• Moderate pointYear-to-date net results fell to a $0.7 million loss from $41.9 million income a year earlier.
• Moderate pointYear-to-date operating income fell 80% to $13.547 million versus the prior-year period.
• Moderate pointYear-to-date EBITDA declined 33% to $110.1 million versus the prior-year period.
• Moderate pointOrganizational redesign included approximately 100 salaried position reductions, or 7% of global salaried headcount.

11 minor points

• Minor pointYear-to-date diluted results fell to a $0.03 loss per share from $1.83 earnings a year earlier.
• Minor pointRestructuring cash impact totaled approximately $12.8 million year-to-date.
• Minor pointHigher working capital requirements constrained quarterly free cash flow to $8.2 million.
• Minor pointQuarterly capital expenditures consumed $21.1 million in cash.
• Minor pointUnallocated corporate adjusted EBITDA expense increased 10% quarterly and 12% year-to-date versus prior-year periods.
• Minor pointSurfactant growth was partially offset by lower Crop Productivity demand.
• Minor pointPolymer volume growth was partially offset by lower volumes in Europe and Asia.
• Minor pointGermany's regulatory-mandated maintenance turnaround, occurring every 5 years, partly offset Polymer earnings growth.
• Minor pointSpecialty Products quarterly earnings growth was partly offset by less favorable product mix.
• Minor pointSpecialty Products year-to-date operating income declined 2% to $19.907 million versus the prior-year period.
• Minor pointSpecialty Products year-to-date adjusted EBITDA declined 2% to $24.3 million versus the prior-year period.

News Explained

The nine-month reported loss was entirely restructuring-related, while adjusted net income was $59.1 million.

Stepan says it executed Project Catalyst’s organizational-redesign phase during the quarter; the restructuring included approximately $5.6 million in charges and approximately 100 salaried position reductions, or 7% of global salaried headcount.

For the first nine months, the company reports a $12.8 million cash impact from restructuring and adjusted net income of $59.1 million, up 40%; it says the reported loss was entirely due to the restructuring charge.

Key Figures

Third-quarter net income: $17.8 million, up 64% Adjusted net income: $21.7 million, up 98% Adjusted EBITDA: $66.3 million, up 18% +5 more

Third-quarter net income

$17.8 million, up 64%

Third quarter 2026 versus prior year

Adjusted net income

$21.7 million, up 98%

Third quarter 2026 versus prior year

Adjusted EBITDA

$66.3 million, up 18%

Third quarter 2026 versus prior year

Net sales

$692.154 million, up 17%

Third quarter 2026 versus prior year

Free cash flow

$8.2 million

Third quarter 2026; negatively impacted by higher working capital requirements

Pre-tax restructuring charge

$5.6 million

Third quarter 2026; related to Project Catalyst

Land sale proceeds

$28.5 million

Sale closed in October; proceeds to pay down debt

Year-to-date net income

$0.7 million loss

Nine months ended September 30, 2026

Previous Earnings Reports

2 past events · Latest: Jul 29

Same Type 2 events

1. Jul 29

   Q2 earnings

   24h Move

   +14.0%

   Q2 adjusted EBITDA rose 45%, while free cash flow was negative from working capital.

2. Apr 28

   Q1 earnings

   24h Move

   -6.3%

   Reported a Q1 loss and restructuring charge, and announced a $30 million land sale agreement.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Key Terms

ebitda, free cash flow, working capital, non-gaap, +1 more

5 terms

ebitda financial

"EBITDA(2) was $57.5 million versus $56.1 million in the prior year."

EBITDA stands for earnings before interest, taxes, depreciation, and amortization. It measures a company's profitability by focusing on the money it makes from its core operations, ignoring expenses like taxes and accounting adjustments. Investors use EBITDA to compare how well different companies are performing financially, as it provides a clearer picture of operational success without the influence of financial structure or accounting choices.

View in glossary

free cash flow financial

"Free cash flow(3) for the quarter was $8.2 million"

Free cash flow is the amount of money a company has left over after paying all its expenses and investing in its business, like buying equipment or updating facilities. It shows how much cash is available to reward shareholders, pay down debt, or save for future growth. This helps investors understand if a company is financially healthy and able to grow.

View in glossary

working capital financial

"negatively impacted by higher working capital requirements."

Working capital is the money a business has available to cover its daily expenses, like paying bills and buying supplies. It’s like the cash in your wallet that helps you handle everyday costs; having enough ensures the business can operate smoothly without running into money shortages.

View in glossary

non-gaap financial

"Adjusted net income and adjusted earnings per share are non-GAAP measures"

Non-GAAP refers to financial measures that companies use to show their earnings or performance without including certain expenses or income that are often added back to give a different picture. It matters because it can make a company's results look better or more favorable, but it may also hide important costs, so investors need to look at both GAAP (official rules) and non-GAAP numbers to get a full understanding.

View in glossary

foreign currency translation financial

"the favorable impact of foreign currency translation."

Foreign currency translation is the process of converting financial statements prepared in one currency into another currency so they can be combined or compared. Investors care because exchange rate swings can change reported revenue, profit and asset values even when a company’s underlying business hasn’t changed — like converting vacation spending back to your home money and seeing the total rise or fall depending on the day’s exchange rate.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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NORTHBROOK, Ill., Oct. 28, 2026 /PRNewswire/ -- Stepan Company (NYSE: SCL) today reported:

Third Quarter 2026 Highlights

• Reported net income was $17.8 million, up 64% versus the prior year.  Adjusted net income⁽¹⁾ was $21.7 million, up 98% versus the prior year.
• EBITDA⁽²⁾ was $57.5 million versus $56.1 million in the prior year.  Adjusted EBITDA⁽²⁾ was $66.3 million, up 18%, year-over-year.
• Global sales volume was up 3% year-over-year.  Organic sales volume was up 7% year-over-year.      
• Cash from Operations was $29.3 million during the quarter.  Free cash flow⁽³⁾ for the quarter was $8.2 million and was negatively impacted by higher working capital requirements.
• Pre-tax earnings include a $5.6 million restructuring charge, related to the Company's previously announced Project Catalyst, inclusive of approximately 100 salaried position reductions or 7% of global salaried headcount.
• In October, the Company closed on its previously announced agreement to sell a parcel of land near its Millsdale site for $28.5 million.  The full cash proceeds will be used to pay down debt.

YTD 2026 Highlights

• Reported net income was a $0.7 million loss versus $41.9 million of income in the prior year.  The current year loss is entirely due to a $76.1 million pre-tax restructuring charge.  The cash impact associated with this restructuring charge was approximately $12.8 million year-to-date.  Adjusted net income⁽¹⁾ was $59.1 million, up 40% versus the prior year.
• EBITDA⁽²⁾ was $110.1 million and Adjusted EBITDA⁽²⁾ was $190.3 million.  Adjusted EBITDA was up 15% year-over-year.
• Organic sales volume was up 4% year-over-year.

"Quarterly earnings were up significantly, driven by improved results in all three segments.  Third quarter adjusted EBITDA of $66.3 million was up 18% year-over-year due to global volume growth, margin recovery and Project Catalyst savings.  Surfactant adjusted EBITDA was up 27% in the quarter and Polymers grew single digits including one time maintenance costs.  Specialty Products adjusted EBITDA was up 5% driven by double digit volume growth," said Luis E. Rojo, President and Chief Executive Officer.  "Surfactant organic sales volume was up 8% and Polymer sales volume was up 3% in the quarter.  The Surfactant volume growth was broad-based and across most end markets.  Within Polymers, the North American Rigid, Spray Foam and Phthalic Anhydride businesses delivered double digit volume growth.  We are pleased with the growth we achieved in several of our key strategic end markets despite ongoing global economic uncertainties and supply chain disruptions.  We executed the organizational redesign phase of Project Catalyst during the quarter in line with expectations."       

Financial Summary

		Three Months Ended September 30,												Nine Months Ended September 30,
($ in thousands, except per share data)		2026				2025				% Change				2026				2025				% Change
Net Sales		$	692,154			$	590,284				17	%		$	1,980,772			$	1,778,228				11	%
Operating Income		$	25,959			$	21,794				19	%		$	13,547			$	68,047				(80)	%
Net Income (Loss)		$	17,813			$	10,839				64	%		$	(682)			$	41,891				(102)	%
Earnings per Diluted Share		$	0.78			$	0.47				66	%		$	(0.03)			$	1.83				(102)	%
Adjusted Net Income *		$	21,688			$	10,948				98	%		$	59,053			$	42,211				40	%
Adjusted Earnings per    Diluted Share *		$	0.94			$	0.48				96	%		$	2.58			$	1.84				40	%

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

Percentage Change in Net Sales

Net sales in the third quarter of 2026 increased 17% year-over-year.  This increase reflects higher selling prices, mainly attributable to the pass-through of higher raw material costs and pricing actions, a 3% increase in sales volume and the favorable impact of foreign currency translation.  Organic sales volume was up 7% year-over-year.  

		Three Months Ended September 30, 2026				Nine Months Ended September 30, 2026
Volume			3	%			1	%
Selling Price & Mix			13	%			7	%
Foreign Translation			1	%			3	%
Total			17	%			11	%

Segment Results

		Three Months Ended September 30,												Nine Months Ended September 30,
($ in thousands)		2026				2025				% Change				2026				2025				% Change
Net Sales
Surfactants		$	486,633			$	422,358				15	%		$	1,424,222			$	1,264,151				13	%
Polymers		$	178,650			$	143,928				24	%		$	486,686			$	452,795				7	%
Specialty Products		$	26,871			$	23,998				12	%		$	69,864			$	61,282				14	%
Total Net Sales		$	692,154			$	590,284				17	%		$	1,980,772			$	1,778,228				11	%
		Three Months Ended September 30,												Nine Months Ended September 30,
($ in thousands, all amounts pre-tax)		2026				2025				% Change				2026				2025				% Change
Operating Income (Loss)
Surfactants		$	27,440			$	15,718				75	%		$	80,350			$	58,015				38	%
Polymers		$	14,569			$	14,104				3	%		$	45,860			$	39,281				17	%
Specialty Products		$	10,185			$	9,634				6	%		$	19,907			$	20,400				(2)	%
Total Segment    Operating Income		$	52,194			$	39,456				32	%		$	146,117			$	117,696				24	%
Corporate Expenses		$	(26,235)			$	(17,662)				49	%		$	(132,570)			$	(49,649)				167	%
Consolidated    Operating Income     (Loss)		$	25,959			$	21,794				19	%		$	13,547			$	68,047				(80)	%
		Three Months Ended September 30,												Nine Months Ended September 30,
($ in millions)		2026				2025				% Change				2026				2025				% Change
EBITDA		$	57.5			$	56.1				2	%		$	110.1			$	164.7				(33)	%
Adjusted EBITDA
Surfactants		$	48.2			$	38.0				27	%		$	144.2			$	120.9				19	%
Polymers		$	23.3			$	22.4				4	%		$	71.9			$	64.0				12	%
Specialty Products		$	11.7			$	11.1				5	%		$	24.3			$	24.8				(2)	%
Unallocated Corporate		$	(16.9)			$	(15.3)				10	%		$	(50.1)			$	(44.6)				12	%
Consolidated Adjusted EBITDA		$	66.3			$	56.2				18	%		$	190.3			$	165.1				15	%

Consolidated adjusted EBITDA⁽²⁾ increased $10.1 million, or 18%, in the quarter.  This increase was primarily due to higher Surfactant earnings driven by sales volume growth and margin recovery.        

• Surfactant net sales were $486.6 million for the quarter, up 15% versus the prior year.  Selling prices were up 10% primarily due to pass through of higher raw material costs and pricing actions.  Global Sales volume was up 3% and organic sales volume increased 8%. Double digit growth in the Consumer Products, Construction & Industrial and Oilfield end markets and to our Tier 2/3 customer base was partially offset by lower Crop Productivity demand.  Foreign currency translation positively impacted net sales by 2%.  Surfactant adjusted EBITDA⁽²⁾ for the quarter increased $10.2 million, or 27%, versus the prior year.  This increase was primarily due to sales volume growth and margin recovery. 
• Polymer net sales were $178.7 million for the quarter, a 24% increase versus the prior year.  Selling prices were up 22%, primarily due to the pass-through of higher raw material costs.  Sales volume increased 3% in the quarter.  North American sales volume was up double digits, inclusive of significant growth in Spray Foam, partially offset by lower volumes in Europe and Asia.  Foreign currency translation negatively impacted net sales by 1% during the quarter.  Polymer adjusted EBITDA⁽²⁾ increased $0.9 million, or 4%, versus the prior year primarily due to sales volume growth that more than offset regulatory-mandated  maintenance turnaround costs, that occur every 5 years, at the Company's Germany site.
• Specialty Products net sales were $26.9 million for the quarter, a 12% increase versus the prior year.  Specialty Products sales volume increased 20% while adjusted EBITDA⁽²⁾ increased $0.6 million, or 5%.  The increase in adjusted EBITDA⁽²⁾ was primarily due to higher sales volume in the medium chain triglycerides product line that was partially offset by less favorable product mix.   

Outlook

"We believe we are positioned to continue delivering growth and executing on our diversification strategy.  Project Catalyst, which is our comprehensive plan designed to further optimize our asset base and create a more productive and agile organization, is contributing to this growth," said Luis E. Rojo, President and Chief Executive Officer.  "Despite the ongoing and significant market uncertainties and challenges, the organization continues to be focused on executing our growth opportunities, productivity plans and cash interventions.  With these actions and the strong first nine-month results, we believe we will deliver full year Adjusted EBITDA growth, positive free cash flow and continue to de-leverage the balance sheet in 2026."  

Notes

(1) Adjusted net income and adjusted earnings per share are non-GAAP measures which exclude deferred compensation income/expense, certain environmental remediation-related costs as well as other significant and infrequent/non-recurring items. See Table II for reconciliations of non-GAAP adjusted net income and adjusted earnings per diluted share.

(2) EBITDA and adjusted EBITDA are non-GAAP measures.  See Table VI for calculations and GAAP reconciliations of EBITDA and adjusted EBITDA.

(3) Free cash flow is a non-GAAP measure and reflects cash generated from operations minus capital expenditures.  Cash generated from operations was $29.3 million during the third quarter of 2026 and capital expenditures were $21.1 million. 

Conference Call

Stepan Company will host a conference call to discuss its third quarter results at 9:00 a.m. ET (8:00 a.m. CT) on October 28, 2026. The call can be accessed by phone and webcast. To access the call by phone, please click on this Registration Link, complete the form and you will be provided with dial in details and a PIN.  To avoid delays, we encourage participants to dial into the conference call ten minutes ahead of the scheduled start time.  The webcast can be accessed through the Investors/Conference Calls page at www.stepan.com. A webcast replay of the conference call will be available at the same location shortly after the call.

Supporting Slides

Slides supporting this press release will be made available at www.stepan.com through the Investors/Presentations page at approximately the same time as this press release is issued.

Corporate Profile

Stepan Company is a major manufacturer of specialty and intermediate chemicals used in a broad range of industries. Stepan is a leading merchant producer of surfactants, which are the key ingredients in consumer and industrial cleaning and disinfection compounds and in agricultural and oilfield solutions. The Company is also a leading supplier of polyurethane polyols used in the expanding thermal insulation market, and CASE (Coatings, Adhesives, Sealants, and Elastomers) industries.

Headquartered in Northbrook, Illinois, Stepan utilizes a network of modern production facilities located in North and South America, Europe and Asia. 

The Company's common stock is traded on the New York Stock Exchange (NYSE) under the symbol SCL. For more information about Stepan Company please visit the Company online at www.stepan.com 

More information about Stepan's sustainability program can be found on the Sustainability page at www.stepan.com 

Certain information in this news release consists of forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include statements about Stepan Company's plans, objectives, strategies, financial performance and outlook, trends, the amount and timing of future cash distributions, prospects or future events and involve known and unknown risks that are difficult to predict. As a result, Stepan Company's actual financial results, performance, achievements or prospects may differ materially from those expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements by the use of words such as "may," "could," "expect," "intend," "plan," "seek," "anticipate," "believe," "estimate," "guidance," "predict," "potential," "continue," "likely," "will," "would," "should," "illustrative" and variations of these terms and similar expressions, or the negative of these terms or similar expressions. Such forward-looking statements are necessarily based upon estimates and assumptions that, while considered reasonable by Stepan Company and its management based on their knowledge and understanding of the business and industry, are inherently uncertain. These statements are not guarantees of future performance, and stockholders should not place undue reliance on forward-looking statements.

There are a number of risks, uncertainties and other important factors, many of which are beyond Stepan Company's control, that could cause actual results to differ materially from the forward-looking statements contained in this news release. Such risks, uncertainties and other important factors include, among other factors, the risks, uncertainties and factors described in Stepan Company's Form 10-K, Form 10-Q and Form 8-K reports and exhibits to those reports, and include (but are not limited to) risks and uncertainties related to our ability to realize cost savings or operating efficiencies associated with strategic initiatives, including Project Catalyst; accidents, unplanned production shutdowns or disruptions in manufacturing facilities; reduced demand due to customer product reformulations or new technologies; our inability to successfully develop or introduce new products; compliance with laws and other legal restrictions, including those relating to the international scope of our business; domestic and global competition; volatility of raw material and energy costs and supply; disruptions in transportation or significant changes in transportation costs; downturns in certain industries and general economic downturns; international business risks, including changes in global trade policies, tariffs and retaliatory measures and countermeasures; currency exchange rate fluctuations; changes in tax policy and potential adverse tax consequences due to the international scope of our business; downgrades in our credit ratings or our ability to access the credit or capital markets if and when necessary; global political, military, security or other instability and increased security regulations; costs, delays and miscalculations in capacity needs related to expansion or other capital projects; interruption or breaches of information technology systems; unfavorable resolution of litigation against us; maintaining and protecting intellectual property rights; our ability to identify suitable acquisition candidates and successfully complete and integrate acquisitions; our ability to retain executive management and key personnel; and issues relating to compliance with our debt covenants.  In addition to the risks described in the Company's periodic reports, the restructuring actions described herein may involve risks related to the execution of facility closures and asset decommissioning, potential operational disruptions, impacts on employees and local communities, environmental compliance, and the realization of anticipated cost savings and efficiencies.

These forward-looking statements are made only as of the date hereof, and Stepan Company undertakes no obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by applicable laws.

* * * * *

Tables follow

Table I
STEPAN COMPANY
For the Three and Nine Months Ended September 30, 2026 and 2025
(Unaudited – in 000's, except per share data)
		Three Months Ended September 30,								Nine Months Ended September 30,
		2026				2025				2026				2025
Net Sales		$	692,154			$	590,284			$	1,980,772			$	1,778,228
Cost of Sales			604,573				519,261				1,728,358				1,559,857
Gross Profit			87,581				71,023				252,414				218,371
Operating Expenses:
Selling			13,726				11,299				40,758				38,064
Administrative			26,607				22,864				72,123				67,079
Research, Development and Technical Services			15,670				14,225				47,858				43,575
Deferred Compensation			37				841				2,001				1,606
			56,040				49,229				162,740				150,324
Business Restructuring			5,582				-				76,127				-
Operating Income			25,959				21,794				13,547				68,047
Other Income (Expense):
Interest, Net			(6,344)				(6,815)				(17,037)				(16,426)
Other, Net			212				1,536				1,377				3,344
			(6,132)				(5,279)				(15,660)				(13,082)
Income (Loss) Before Provision for Income   Taxes			19,827				16,515				(2,113)				54,965
Provision for Income Taxes			2,014				5,676				(1,431)				13,074
Net Income (Loss)			17,813				10,839				(682)				41,891
Net Income (Loss) Per Common Share
Basic		$	0.78			$	0.47			$	(0.03)			$	1.83
Diluted		$	0.78			$	0.47			$	(0.03)			$	1.83
Shares Used to Compute Net Income Per    Common Share
Basic			22,906				22,875				22,897				22,869
Diluted			22,978				22,893				22,897				22,888

 

Table II
Reconciliation of Non-GAAP Net Income (Loss) and Earnings per Diluted Share*
		Three Months Ended September 30,																Nine Months Ended September 30,
($ in thousands, except per share amounts)		2026				EPS				2025				EPS				2026				EPS				2025				EPS
Net Income (Loss) Reported		$	17,813			$	0.78			$	10,839			$	0.47			$	(682)			$	(0.03)			$	41,891			$	1.83
Deferred Compensation (Income)     Expense		$	52			$	-			$	(149)			$	-			$	581			$	0.03			$	(549)			$	(0.02)
Environmental Remediation     Expense		$	2,391			$	0.10			$	258			$	0.01			$	2,561			$	0.11			$	869			$	0.03
Business Restructuring		$	1,432			$	0.06			$	-			$	-			$	56,593			$	2.47			$	-			$	-
Adjusted Net Income		$	21,688			$	0.94			$	10,948			$	0.48			$	59,053			$	2.58			$	42,211			$	1.84

* All amounts in this table are presented after-tax

The Company believes that certain non-GAAP measures, in conjunction with comparable GAAP measures, are useful for evaluating the Company's operating performance and financial condition.  The Company uses this non-GAAP information as an indicator of business performance and evaluates management's effectiveness with specific reference to these indicators.  Management believes that these non-GAAP financial measures provide useful supplemental information because they exclude non-operational items that affect comparability between years.  These measures should be considered in addition to, not as substitutes for or superior to, measures of financial performance prepared in accordance with GAAP and may differ from similarly titled measures presented by other companies.  The Company's Annual Report on Form 10-K for the year ended December 31, 2025 contains additional information regarding the use of non-GAAP financial measures.

Summary of Third Quarter 2026 Adjusted Net Income Items

Adjusted net income excludes non-operational deferred compensation income/expense, certain environmental remediation costs and other significant and infrequent or non-recurring items.

• Deferred Compensation: The third quarter of 2026 reported net income includes $0.1 million of after-tax expense versus $0.1 million of after-tax income in the prior year. 
• Environmental Remediation: The third quarter of 2026 reported net income includes $2.4 million of after-tax expense versus $0.3 million of after-tax expense in the prior year.  The higher current year expense primarily reflects a reserve adjustment related to the Company's Maywood, NJ site.
• Business Restructuring: The third quarter of 2026 reported net income includes $1.4 million of after-tax expense related to restructuring charges.  There were no restructuring charges recognized in the prior year quarter. 

Table III
Reconciliation of Pre-Tax to After-Tax Adjustments
Management uses the non-GAAP adjusted net income metric to evaluate the Company's operating performance.  Management excludes the items listed in the table below because they are non-operational items.  The cumulative tax effect is typically calculated using the statutory tax rates for the jurisdictions in which the transactions occurred.
		Three Months Ended September 30,																Nine Months Ended September 30,
($ in thousands, except per share amounts)		2026				EPS				2025				EPS				2026				EPS				2025				EPS
Pre-Tax Adjustments
Deferred Compensation (Income)      Expense		$	69							$	(198)							$	765							$	(732)
Environmental Remediation      Expense		$	3,145							$	344							$	3,368							$	1,158
Business Restructuring		$	5,582							$	-							$	76,127							$	-
Total Pre-Tax Adjustments		$	8,796							$	146							$	80,260							$	426
Cumulative Tax Effect on       Adjustments		$	(4,921)							$	(37)							$	(20,525)							$	(106)
After-Tax Adjustments		$	3,875			$	0.16			$	109			$	0.01			$	59,735			$	2.61			$	320			$	0.01

 

Table IV
Deferred Compensation Plans
The full effect of the deferred compensation plans on quarterly pre-tax income was $0.1 million of expense versus $0.2 million of income in the prior year.  The quarter-end market prices of Company stock and the impact of deferred compensation on specific income statement line items is summarized below:
		2026												2025
		9/30				6/30				3/31				12/31				9/30				6/30				3/31
Stepan Company		$	62.38			$	55.72			$	49.98			$	47.36			$	47.70			$	54.58			$	55.04

 

		Three Months Ended September 30,								Nine Months Ended September 30,
($ in thousands)		2026				2025				2026				2025
Deferred Compensation
Operating Income (Expense)		$	(37)			$	(841)			$	(2,001)			$	(1,606)
Other, net – Mutual Fund Gain			(32)				1,039				1,236				2,338
Total Pre-Tax		$	(69)			$	198			$	(765)			$	732
Total After-Tax		$	(52)			$	149			$	(581)			$	549

Effects of Foreign Currency Translation

The Company's foreign subsidiaries transact business and report financial results in their respective local currencies. These results are translated into U.S. dollars at average foreign exchange rates appropriate for the reporting period.  The table below presents the impact that foreign currency translation had on select income statement line items. 

($ in millions)		Three Months Ended September 30,								Change				Change Due to Foreign Currency Translation				Nine Months Ended September 30,								Change				Change Due to Foreign Currency Translation
		2026				2025												2026				2025
Net Sales		$	692.2			$	590.3			$	101.9			$	8.5			$	1,980.8			$	1,778.2			$	202.6			$	51.0
Gross Profit			87.6				71.0			$	16.6				0.7				252.4				218.4			$	34.0				6.1
Operating Income			26.0				21.8			$	4.2				0.4				13.5				68.0			$	(54.5)				3.8
Pretax Income     (Loss)			19.8				16.5			$	3.3				0.4				(2.1)				55.0			$	(57.1)				3.9

Corporate Expenses

		Three Months Ended September 30,												Nine Months Ended September 30,
($ in thousands)		2026				2025				% Change				2026				2025				% Change
Total Corporate Expenses		$	26,235			$	17,662				49	%		$	132,570			$	49,649				167	%
Less:
Deferred Compensation Expense		$	37			$	841				(96)	%		$	2,001			$	1,606				25	%
Environmental Remediation       Expense		$	3,145			$	344				814	%		$	3,368			$	1,158				191	%
Business Restructuring		$	5,582			$	-			NM				$	76,127			$	-			NM
Adjusted Corporate Expenses		$	17,471			$	16,477				6	%		$	51,074			$	46,885				9	%

Adjusted Corporate expenses increased $1.0 million, or 6%, for the quarter.  This increase was primarily due to higher incentive-based compensation expenses.  

Table V
Stepan Company
Consolidated Balance Sheets
September 30, 2026 and December 31, 2025
		September 30, 2026				December 31, 2025
ASSETS
Current Assets		$	982,764			$	858,959
Property, Plant & Equipment, Net			1,132,891				1,219,627
Other Assets			274,742				279,116
Total Assets		$	2,390,397			$	2,357,702
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities		$	742,975			$	666,494
Deferred Income Taxes			11,008				11,450
Long-term Debt			341,687				340,975
Other Non-current Liabilities			75,940				94,773
Total Stepan Company Stockholders' Equity			1,218,787				1,244,010
Total Liabilities and Stockholders' Equity		$	2,390,397			$	2,357,702

Selected Balance Sheet Information 

The Company's total debt decreased by $13.3 million and cash decreased by $15.6 million versus June 30, 2026.  The Company's net debt level increased $2.3 million versus June 30, 2026 and its net debt ratio was 31% which was constant with the prior quarter (Net Debt and Net Debt Ratio are non-GAAP measures, reconciliations of which are shown in the table below).  Management uses the non-GAAP net debt metric to show a more complete picture of the Company's overall liquidity, financial flexibility and leverage level. 

($ in millions)		September 30, 2026				June 30, 2026				March 31, 2026				December 31, 2025
Net Debt
Total Debt		$	634.1			$	647.4			$	651.7			$	626.7
Cash			98.1				113.7				140.8				132.7
Net Debt		$	536.0			$	533.7			$	510.9			$	494.0
Equity			1,218.8				1,212.0				1,193.0				1,244.0
Net Debt + Equity		$	1,754.8			$	1,745.7			$	1,703.9			$	1,738.0
Net Debt / (Net Debt + Equity)			31	%			31	%			30	%			28	%

The major working capital components were:

($ in millions)		September 30, 2026				June 30, 2026				March 31, 2026				December 31, 2025
Net Receivables		$	502.1			$	492.3			$	433.7			$	388.0
Inventories			340.0				324.5				289.0				298.8
Accounts Payable			(315.2)				(321.7)				(285.7)				(261.7)
		$	526.9			$	495.1			$	437.0			$	425.1

 

Table VI
Reconciliations of Non-GAAP EBITDA and Adjusted EBITDA
Management uses the non-GAAP EBITDA and adjusted EBITDA metrics to evaluate the Company's operating performance.  Management excludes the items listed in the table below because they are non-operational items.
		Three Months Ended September 30, 2026
($ in millions)		Surfactants				Polymers				Specialty Products				Unallocated Corporate				Consolidated
Net Income																		$	17.8
Provision for Income Taxes																			2.0
Interest Expense, Net																			6.3
EBIT																		$	26.2
Other, Net Income																			(0.2)
Operating Income		$	27.4			$	14.6			$	10.2			$	(26.2)			$	26.0
Depreciation and Amortization			20.8				8.7				1.5				0.3				31.3
Other, Net Income			-				-				-				0.2				0.2
EBITDA																		$	57.5
Deferred Compensation			-				-				-				0.1				0.1
Environmental Remediation			-				-				-				3.1				3.1
Business Restructuring			-				-				-				5.6				5.6
Adjusted EBITDA		$	48.2			$	23.3			$	11.7			$	(16.9)			$	66.3
		Three Months Ended September 30, 2025
($ in millions)		Surfactants				Polymers				Specialty Products				Unallocated Corporate				Consolidated
Net Income																		$	10.8
Provision for Income Taxes																			5.7
Interest Expense, Net																			6.8
EBIT																		$	23.3
Other, Net Income																			(1.5)
Operating Income		$	15.7			$	14.1			$	9.6			$	(17.7)			$	21.8
Depreciation and Amortization			22.3				8.3				1.5				0.7				32.8
Other, Net Income			-				-				-				1.5				1.5
EBITDA																		$	56.1
Deferred Compensation			-				-				-				(0.2)				(0.2)
Environmental Remediation			-				-				-				0.3				0.3
Adjusted EBITDA			38.0				22.4				11.1				(15.3)				56.2
		Nine Months Ended September 30, 2026
($ in millions)		Surfactants				Polymers				Specialty Products				Unallocated Corporate				Consolidated
Net Income																		$	(0.7)
Provision for Income Taxes																			(1.4)
Interest Expense, Net																			17.0
EBIT																		$	14.9
Other, Net Income																			(1.4)
Operating Income		$	80.3			$	45.9			$	19.9			$	(132.6)			$	13.5
Depreciation and Amortization			63.9				26.0				4.4				0.9				95.2
Other, Net Income			-				-				-				1.4				1.4
EBITDA																		$	110.1
Deferred Compensation			-				-				-				0.8				0.8
Environmental Remediation			-				-				-				3.4				3.4
Business Restructuring			-				-				-				76.1				76.1
Adjusted EBITDA		$	144.2			$	71.9			$	24.3			$	(50.1)			$	190.3
		Nine Months Ended September 30, 2025
($ in millions)		Surfactants				Polymers				Specialty Products				Unallocated Corporate				Consolidated
Net Income																		$	41.9
Provision for Income Taxes																			13.1
Interest Expense, Net																			16.4
EBIT																		$	71.4
Other, Net Income																			(3.3)
Operating Income		$	58.0			$	39.3			$	20.4			$	(49.6)			$	68.1
Depreciation and Amortization			62.9				24.7				4.4				1.3				93.3
Other, Net Income			-				-				-				3.3				3.3
EBITDA																		$	164.7
Deferred Compensation			-				-				-				(0.7)				(0.7)
Environmental Remediation			-				-				-				1.1				1.1
Adjusted EBITDA			120.9				64.0				24.8				(44.6)				165.1

 

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SOURCE Stepan Company

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What were Stepan's third-quarter 2026 earnings?

Stepan reported net income of $17.8 million, up 64% year-over-year, and diluted earnings of $0.78 per share. Adjusted net income was $21.7 million, up 98%, while adjusted diluted earnings were $0.94 per share, up 96%.

What is Stepan's outlook for full-year 2026?

Stepan expects full-year adjusted EBITDA growth, positive free cash flow and continued debt reduction in 2026. These are company expectations, not completed results.

What drove Stepan's third-quarter 2026 sales growth?

Stepan's 17% sales increase reflected a 13% contribution from selling price and mix, 3% from volume and 1% from foreign currency translation. Higher selling prices primarily reflected the pass-through of higher raw material costs and pricing actions.

Why did Stepan's Polymer earnings grow despite maintenance costs?

Polymer sales volume growth more than offset regulatory-mandated maintenance turnaround costs at Stepan's Germany site. The turnaround occurs every 5 years. Quarterly Polymer adjusted EBITDA increased 4% to $23.3 million, while sales volume increased 3%.