Stepan reported higher third-quarter earnings, with adjusted EBITDA rising 18% year over year as volumes grew, margins recovered and savings from its Project Catalyst restructuring began to contribute. The company also completed a $28.5 million land sale and declared a quarterly dividend of $0.405 per share.
For the first nine months of 2026, Stepan posted a small net loss, largely reflecting restructuring charges. On an adjusted basis, earnings and EBITDA were higher than a year earlier.
Third-quarter results
- Net sales rose 17% to $692.2 million. The increase reflected a 13% contribution from selling prices and mix, 3% higher sales volume and a 1% benefit from foreign-currency translation. The company said pricing mainly reflected the pass-through of higher raw-material costs and pricing actions.
- Net income increased 64% to $17.8 million, or $0.78 per diluted share. Adjusted net income nearly doubled to $21.7 million, or $0.94 per diluted share.
- Adjusted EBITDA was $66.3 million, up 18%. Reported EBITDA was $57.5 million, compared with $56.1 million a year earlier.
- Global sales volume increased 3%, while organic sales volume rose 7%. Surfactant organic volume was up 8%, and Polymer sales volume increased 3%. Stepan said Surfactant growth was broad-based across most end markets; in Polymers, North American Rigid, Spray Foam and Phthalic Anhydride each recorded double-digit volume growth.
- All three segments improved adjusted EBITDA, according to CEO Luis Rojo. Surfactants rose 27%, Specialty Products increased 5% on double-digit volume growth, and Polymers posted single-digit growth despite one-time maintenance costs.
- Cash from operations was $29.3 million and free cash flow was $8.2 million. The company said higher working-capital requirements weighed on free cash flow.
- Quarterly results included a $5.6 million pre-tax restructuring charge tied to Project Catalyst. During the quarter, Stepan carried out the program’s organizational redesign, which includes eliminating about 100 salaried positions—approximately 7% of its global salaried workforce.
Year-to-date performance and other developments
- Nine-month net sales increased 11% to $2.0 billion, while organic sales volume rose 4%.
- Reported net income was a loss of $0.7 million, compared with income of $41.9 million in the same period last year. Stepan attributed the current-year loss to a $76.1 million pre-tax restructuring charge. The associated cash impact was about $12.8 million year to date.
- Adjusted net income rose 40% to $59.1 million. Adjusted EBITDA increased 15% to $190.3 million; reported EBITDA was $110.1 million.
- Stepan completed the sale of land near its Millsdale site for $28.5 million in October. It plans to use all of the cash proceeds to pay down debt.
- The board declared a quarterly cash dividend of $0.405 per share. Shareholders of record on December 1, 2026, are due to be paid on December 15.
The land-sale proceeds are earmarked for debt reduction, while the restructuring charge substantially separates reported year-to-date results from the company’s adjusted earnings measures.