STEPAN COSCL決算レポート
NYSE · 必須消費財 · 石鹸、洗剤、清掃剤、香水、化粧品
Stepan Company is an American manufacturer of specialty chemicals headquartered in Northbrook, Illinois. The company was founded in 1932 by Alfred C. Stepan, Jr., and has approximately 2,000 employees. It is currently run by his grandson, F. Quinn Stepan, Jr. The company describes itself as the largest global merchant manufacturer of anionic surfactants, which are used to enhance the foaming and cleaning capabilities of detergents, shampoos, toothpastes, and cosmetics.
What changed in STEPAN CO's 10-K — 2024 vs 2025
Top changes in STEPAN CO's 2025 10-K
383 paragraphs added · 360 removed · 302 edited across 2 sections
- Item 7. Management's Discussion & Analysis+367 / −344 · 288 edited
- Item 1C. Cybersecurity+16 / −16 · 14 edited
Item 1C. Cybersecurity
Cybersecurity — threats and controls disclosure
14 edited+2 added−2 removed40 unchanged
Item 1C. Cybersecurity
Cybersecurity — threats and controls disclosure
14 edited+2 added−2 removed40 unchanged
2024 filing
2025 filing
Brazil Tax Rescission Action In March 2017, the Brazil Supreme Court ruled that ICMS (State VAT) does not represent a Company’s revenue and should not be included in the calculation basis of certain indirect taxes (PIS/COFINS). Based on the Supreme Court’s decision, the Company’s Brazilian subsidiary filed a lawsuit on March 23, 2017 to recover PIS/COFINS overpayments.
Brazil Tax Rescission Action In March 2017, the Brazil Supreme Court ruled that ICMS (State VAT) does not represent a Company’s revenue and should not be included in the calculation basis of certain indirect taxes (PIS/COFINS). Based on the Supreme Court’s decision, the Company’s 19 Brazilian subsidiary filed a lawsuit on March 23, 2017 to recover PIS/COFINS overpayments.
The ultimate amount for which the Company is liable could differ materially from the Company’s current recorded liability. 18 D’Imperio Property Site During the mid-1970’s, Jerome Lightman and the Lightman Drum Company disposed of hazardous substances generated by the Company at several sites in New Jersey, including the D’Imperio Property Superfund Site (the D’Imperio site).
The ultimate amount for which the Company is liable could differ materially from the Company’s current recorded liability. D’Imperio Property Site During the mid-1970’s, Jerome Lightman and the Lightman Drum Company disposed of hazardous substances generated by the Company at several sites in New Jersey, including the D’Imperio Property Superfund Site (the D’Imperio site).
In September and October 2024, the Brazil Superior Court and Supreme Court, respectively, ruled that the generally held two-year “res judicata” principle would start from the May 2021 ruling and not the final ruling 19 in prior taxpayer cases (e.g., November 30, 2018, for the Company’s case).
In September and October 2024, the Brazil Superior Court and Supreme Court, respectively, ruled that the generally held two-year “res judicata” principle would start from the May 2021 ruling and not the final ruling in prior taxpayer cases (e.g., November 30, 2018, for the Company’s case).
The Company’s Cybersecurity Senior Manager, who reports to the Chief Information Officer, has earned multiple cybersecurity industry certifications and has over fifteen years of IT and cybersecurity experience. The Company’s cybersecurity program and cybersecurity practices are reviewed by internal and external auditors. The Company’s cybersecurity team provides periodic reports to such auditors. 17 It em 2.
The Company’s Cybersecurity Senior Manager, who reports to the Chief Information Officer, has earned multiple cybersecurity industry certifications and has over fifteen years of IT and cybersecurity experience. The Company’s cybersecurity program and cybersecurity practices are reviewed by internal and external auditors. The Company’s cybersecurity team provides periodic reports to such auditors. It em 2.
District Court for the District of New Jersey entered a consent decree among the Company, the United States, the New Jersey Department of Environmental Protection (NJDEP) and the New Jersey Spill Compensation Fund Administrator that requires the Company to take certain actions and to pay certain past costs of the United States and NJDEP.
District Court for the District of New Jersey entered a consent decree among the Company, the United States, the New Jersey Department of Environmental Protection (NJDEP) and the New Jersey 18 Spill Compensation Fund Administrator that requires the Company to take certain actions and to pay certain past costs of the United States and NJDEP.
Risk Factors” of this Annual Report on Form 10-K. Cybersecurity Governance The Audit Committee of the Company’s Board of Directors (the Audit Committee) oversees the Company’s cybersecurity risk management. The Audit Committee receives quarterly reports on cybersecurity risks and risk management from the Company’s Chief Information Officer.
Risk Factors” of this Annual Report on Form 10-K. Cybersecurity Governance The Audit Committee of the Company’s Board of Directors (the Audit Committee) oversees the Company’s cybersecurity risk management. The Audit Committee receives quarterly reports on cybersecurity risks and risk management from the Company’s Chief 17 Information Officer.
As of the filing of this Form 10-K, we are not aware of any attacks, incidents, misuse or manipulation that have occurred since the beginning of 2024 that have materially affected, or are reasonably likely to materially affect, us, including our business strategy, results of operations or financial condition.
As of the filing of this Form 10-K, we are not aware of any attacks, incidents, misuse or manipulation that have occurred since the beginning of 2025 that have materially affected, or are reasonably likely to materially affect, us, including our business strategy, results of operations or financial condition.
The Company has been included in the Russell 2000 Index since 1992. The graph assumes $100 was invested on December 31, 2019 and shows the cumulative total return as of each December 31 thereafter. It em 6. (Removed and Reserved) 22
The Company has been included in the Russell 2000 Index since 1992. The graph assumes $100 was invested on December 31, 2020 and shows the cumulative total return as of each December 31 thereafter. It em 6. (Removed and Reserved) 22
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities (a) The Company’s common stock is listed and traded on the New York Stock Exchange under the symbol SCL. As of January 31, 2025, there were 1,912 holders of record of the Company’s common stock.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities (a) The Company’s common stock is listed and traded on the New York Stock Exchange under the symbol SCL. As of January 31, 2026, there were 1,952 holders of record of the Company’s common stock.
The Company had paid the current owner $4.0 million for the Company’s portion of environmental response costs at the Wilmington site through December 31, 2024. The Company has recorded a liability for its portion of the estimated remediation costs for the site.
The Company had paid the current owner $4.3 million for the Company’s portion of environmental response costs at the Wilmington site through December 31, 2025. The Company has recorded a liability for its portion of the estimated remediation costs for the site.
(4) Consists of 400 shares and 1,082 shares of Company common stock tendered by employees to settle statutory withholding taxes related to the exercise of SARs and the distribution of restricted stock units, respectively. 21 (c) Stock Performance Graph The following stock performance graph compares the yearly change since December 31, 2019, in cumulative return on the common stock of the Company on a dividend reinvested basis to the Dow Jones Chemical Industry Index and the Russell 2000 Index.
(2) Consists of shares of Company common stock tendered by employees to settle statutory withholding taxes related to the distribution of restricted stock units. 21 (c) Stock Performance Graph The following stock performance graph compares the yearly change since December 31, 2020, in cumulative return on the common stock of the Company on a dividend reinvested basis to the Dow Jones Chemical Industry Index and the Russell 2000 Index.
(b) Below is a summary by month of shares purchases by the Company during the fourth quarter of 2024: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Approximate Dollar Value of Shares That May Yet be Purchased Under the Plans or Programs (1) October 75 (2) $ 75.54 — $ 125,050,905 November 150 (3) $ 77.67 — $ 125,050,905 December 1,482 (4) $ 66.30 — $ 125,050,905 Total 1,707 $ 67.71 — $ 125,050,905 (1) On October 20, 2021, the Company announced that its Board of Directors had authorized the Company to repurchase up to $150,000,000 of its outstanding common stock.
(b) Below is a summary by month of shares purchases by the Company during the fourth quarter of 2025: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Approximate Dollar Value of Shares That May Yet be Purchased Under the Plans or Programs (1) October — $ — — $ 125,050,905 November 75 (2) $ 46.62 — $ 125,050,905 December 2,202 (2) $ 47.08 — $ 125,050,905 Total 2,277 $ 47.07 — $ 125,050,905 (1) On October 20, 2021, the Company announced that its Board of Directors had authorized the Company to repurchase up to $150,000,000 of its outstanding common stock.
Under this program, which does not have an expiration date, repurchases may be made from time to time through open market transactions, privately negotiated transactions or a combination of the foregoing, subject to applicable laws. (2) Consists of 75 shares of Company common stock tendered by employees to settle statutory withholding taxes related to the distribution of restricted stock units.
Under this program, which does not have an expiration date, repurchases may be made from time to time through open market transactions, privately negotiated transactions or a combination of the foregoing, subject to applicable laws.
Based on current information, the Company believes that its recorded liability is reasonable; however, depending on the ultimate resolution of this matter, the amount for which the Company is liable could differ materially from the current recorded liability. It em 4. Mine Safety Disclosures Not Applicable. 20 PA RT II It em 5.
The alleged damages may result in a range of possible penalties and the Company recorded a liability for this matter during the first quarter of 2024. Depending on the ultimate resolution of this matter, the amount for which the Company is liable could differ materially from the current recorded liability.
Removed
The alleged damages may result in penalties and the Company believes it may have exposure for this claim; however, at this stage, the Company is unable to predict the ultimate outcome of this claim, the allocation of costs among potentially responsible parties or what impact, if any, the outcome might have on the Company’s financial position, results of operations or cash flows.
Added
Other Matters On March 19, 2025, the Company received a pre-filing notice from USEPA for alleged violations of the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) associated with certain of the Company’s biocide products sold by a licensed distributor. USEPA assessed a civil penalty of $1.1 million, which the Company paid on July 2, 2025.
Removed
(3) Consists of 87 shares and 63 shares of Company common stock tendered by employees to settle statutory withholding taxes related to the exercise of SARs and the distribution of restricted stock units, respectively.
Added
During the second half of 2025, the Company recovered $1.0 million of the USEPA penalty from third parties. It em 4. Mine Safety Disclosures Not Applicable. 20 PA RT II It em 5.
Item 7. Management's Discussion & Analysis
Management's Discussion & Analysis (MD&A) — revenue / margin commentary
288 edited+79 added−56 removed251 unchanged
Item 7. Management's Discussion & Analysis
Management's Discussion & Analysis (MD&A) — revenue / margin commentary
288 edited+79 added−56 removed251 unchanged
2024 filing
2025 filing
Majority of the performance shares vest only upon the Company’s achievement of certain levels of financial performance in specified measurement periods as approved by the Human Capital and Compensation Committee of the Board of Directors.
The majority of the performance shares vest only upon the Company’s achievement of certain levels of financial performance in specified measurement periods as approved by the Human Capital and Compensation Committee of the Board of Directors.
In addition, the Company is from time to time involved in routine legal proceedings incidental to the conduct of its business, including personal injury, property damage, tax, trade and labor matters. The Company believes that it has made adequate provisions for the costs it is likely to incur with respect to these claims.
In addition, the Company is from time to time involved in routine legal proceedings incidental to the conduct of its business, including personal injury, property damage, tax, trade and labor matters. The Company believes that it has made adequate provisions for the costs it is likely to incur with respect to these claims.
As such, estimates of the total costs, or range of possible costs, of remediation, if any, or the Company’s share of such costs, if any, cannot be determined with respect to these sites. Consequently, the Company is unable to predict the effect thereof on the Company’s financial position, cash flows and results of operations.
As such, estimates of the total costs, or range of possible costs, of remediation, if any, or the Company’s share of such costs, if any, cannot be determined with respect to these sites. Consequently, the Company is unable to predict the effect thereof on the Company’s financial position, cash flows and results of operations.
Such conditions could include significant adverse changes in the business environment, significant declines in forecasted operations or an approved plan to discontinue an asset or an asset group before the end of its useful life. Included in the computer equipment and software component of machinery and equipment are costs related to the acquisition and development of internal-use software.
Such 49 conditions could include significant adverse changes in the business environment, significant declines in forecasted operations or an approved plan to discontinue an asset or an asset group before the end of its useful life. Included in the computer equipment and software component of machinery and equipment are costs related to the acquisition and development of internal-use software.
Under the most restrictive of these debt covenants: 1. The Company is required to maintain a minimum interest coverage ratio, as defined within the agreements, of 3.50 to 1.00, for the preceding four calendar quarters. 2. The Company is required to maintain an existing maximum net leverage ratio, as defined within the agreements, not to exceed 3.75 to 1.00. 3.
Under the most restrictive of these debt covenants: 1. The Company is required to maintain a minimum interest coverage ratio, as defined within the agreements, of 3.50 to 1.00, for the preceding four calendar quarters. 2. The Company is required to maintain an existing maximum net leverage ratio, as defined within the agreements, not to exceed 3.50 to 1.00. 3.
Furthermore, GAAP establishes a framework, in the form of a three-level hierarchy, for measuring fair value that prioritizes the inputs to valuation techniques used to measure fair value. The following describes the hierarchy levels: Level 1 - quoted prices in active markets for identical assets and liabilities.
Furthermore, GAAP establishes a framework, in the form of a three-level hierarchy, for measuring fair value that prioritizes the inputs to valuation techniques used to measure fair value. The following describes the hierarchy levels: 50 Level 1 - quoted prices in active markets for identical assets and liabilities.
In practice, this is rare as it would require a customer to make a payment prior to a performance obligation being satisfied. When such situations do arise, the Company maintains a deferred revenue liability until the time a performance obligation has been satisfied.
In practice, this is rare 83 as it would require a customer to make a payment prior to a performance obligation being satisfied. When such situations do arise, the Company maintains a deferred revenue liability until the time a performance obligation has been satisfied.
Capitalized costs for internal-use software include external direct costs of materials and services consumed in obtaining and developing the software. For development projects where major internal resources are committed, payroll 48 and payroll-related costs incurred during the application development phase of the project are also capitalized.
Capitalized costs for internal-use software include external direct costs of materials and services consumed in obtaining and developing the software. For development projects where major internal resources are committed, payroll and payroll-related costs incurred during the application development phase of the project are also capitalized.
Therefore, the establishment of deferred taxes may be required with respect to the excess of the investment value for financial reporting over the tax basis of investments in those foreign subsidiaries (also referred to as book-over-tax outside basis differences).
Therefore, the establishment of deferred taxes may be required with respect to the excess of the investment value for financial reporting over the tax 64 basis of investments in those foreign subsidiaries (also referred to as book-over-tax outside basis differences).
Currently, the useful lives for the Company’s finite-lived intangible assets are as follows: patents – 15 years; trademarks – eight to 11 years ; customer relationships – ten to 20 years and know-how – seven to 20 years .
Currently, the useful lives for the Company’s finite-lived intangible assets are as follows: patents – 15 years; trademarks – eight to ten years ; customer relationships – ten to 20 years and know-how – seven to 20 years .
The credit agreement requires the Company to pay a commitment fee ranging from 0.125 percent to 0.250 percent per annum, which also depends on the Company’s net leverage ratio.
The Credit Agreement requires the Company to pay a commitment fee ranging from 59 0.125 percent to 0.250 percent per annum, which also depends on the Company’s net leverage ratio.
Based on the Company’s present knowledge with respect to its involvement at these sites, the possibility of other viable entities’ responsibilities 33 for cleanup, and the extended period over which any costs would be incurred, management believes that the Company has no material liability at these sites and that these matters, individually and in the aggregate, will not have a material effect on the Company’s financial position.
Based on 76 the Company’s present knowledge with respect to its involvement at these sites, the possibility of other viable entities’ responsibilities for cleanup, and the extended period over which any costs would be incurred, management believes that the Company has no material liability at these sites and that these matters, individually and in the aggregate, will not have a material effect on the Company’s financial position.
Following are summaries of the Company’s major contingencies at December 31, 2024: Maywood, New Jersey Site The Company’s property in Maywood, New Jersey, property formerly owned by the Company adjacent to its current site and other nearby properties (collectively, the Maywood site) were listed on the National Priorities List in September 1993 pursuant to the provisions of CERCLA because of alleged chemical and radiological contamination.
Following are summaries of the Company’s major contingencies at December 31, 2025: Maywood, New Jersey Site The Company’s property in Maywood, New Jersey, property formerly owned by the Company adjacent to its current site and other nearby properties (collectively, the Maywood site) were listed on the National Priorities List in September 1993 pursuant to the provisions of CERCLA because of alleged chemical and radiological contamination.
While the amounts involved may be material, such repurchases or exchanges, if any, will depend on prevailing market conditions, the Company’s liquidity requirements, contractual restrictions and other factors. During the twelve months ended December 31, 2024, the Company did not purchase any shares of its common stock on the open market.
While the amounts involved may be material, such repurchases or exchanges, if any, will depend on prevailing market conditions, the Company’s liquidity requirements, contractual restrictions and other factors. During the twelve months ended December 31, 2025, the Company did not purchase any shares of its common stock on the open market.
In past years, at the time a plan participant retired, the plan trustee would periodically purchase insurance contracts to cover the future payments due the retiree. This practice is no longer followed. The contracts are revocable, and the related plan obligations are not considered settled. Therefore, the plan assets and obligations include the insured amounts. 68 Plan Assets U.S.
In past years, at the time a plan participant retired, the plan trustee would periodically purchase insurance contracts to cover the future payments due the retiree. This practice is no longer followed. The contracts are revocable, and the related plan obligations are not considered settled. Therefore, the plan assets and obligations include the insured amounts. 72 Plan Assets U.S.
The credit agreement requires the maintenance of certain financial ratios and compliance with certain other covenants that are similar to the Company’s existing debt agreements, including net worth, interest coverage, leverage financial covenants and limitations on restricted payments, indebtedness and liens. The Company’s foreign subsidiaries had no debt outstanding at December 31, 2024.
The Credit Agreement requires the maintenance of certain financial ratios and compliance with certain other covenants that are similar to the Company’s existing debt agreements, including net worth, interest coverage, leverage financial covenants and limitations on restricted payments, indebtedness and liens. The Company’s foreign subsidiaries had no debt outstanding at December 31, 2025.
Any resulting translation adjustments are included within the consolidated balance sheets on the accumulated other 51 comprehensive loss line of stockholders’ equity. Gains or losses on foreign currency transactions are reflected in the other, net line of the consolidated statements of income. The Company has four foreign subsidiaries whose functional currencies are the U.S. dollar.
Any resulting translation adjustments are included within the consolidated balance sheets on the accumulated other 52 comprehensive loss line of stockholders’ equity. Gains or losses on foreign currency transactions are reflected in the other, net line of the consolidated statements of income. The Company has four foreign subsidiaries whose functional currencies are the U.S. dollar.
In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.
In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
At December 31, 2024 , the Company held an interest rate swap contract with a notional value of $ 100,000,000 that was designated as a cash flow hedge. Period-to-period changes in the fair value of the interest rate swap are initially recognized as gains or losses in other comprehensive income.
At December 31, 2025 , the Company held an interest rate swap contract with a notional value of $ 100,000,000 that was designated as a cash flow hedge. Period-to-period changes in the fair value of the interest rate swap are initially recognized as gains or losses in other comprehensive income.
The overall investment return forecast reflects the target allocations and the capital markets forecasts for each asset category, plus a premium for active asset management expected over the long term. 70 U.K. Plan The overall expected long-term return on plan assets is a weighted average of the expected long-term returns for equity securities, debt securities and other assets.
The overall investment return forecast reflects the target allocations and the capital markets forecasts for each asset category, plus a premium for active asset management expected over the long term. 74 U.K. Plan The overall expected long-term return on plan assets is a weighted average of the expected long-term returns for equity securities, debt securities and other assets.
As of December 31, 2024, the Company had outstanding letters of credit totaling $8.7 million under the CIC Credit Agreement. The Company also maintains import and export letters of credit. and standby letters of credit under its workers’ compensation insurance agreements and for other purposes, as needed from time to time, which are issued under the Credit Agreement.
As of December 31, 2025, the Company had outstanding letters of credit totaling $8.7 million under the CIC Credit Agreement. The Company also maintains import and export letters of credit and standby letters of credit under its workers’ compensation insurance agreements and for other purposes, as needed from time to time, which are issued under the Credit Agreement.
(2) Interest payments on debt obligations represent interest on all Company debt at December 31, 2024. Future interest rates may change, and, therefore, actual interest payments could differ from those disclosed in the above table. (3) The majority of operating lease obligations consist of railcar and real estate leases.
(2) Interest payments on debt obligations represent interest on all Company debt at December 31, 2025. Future interest rates may change, and, therefore, actual interest payments could differ from those disclosed in the above table. (3) The majority of operating lease obligations consist of railcar and real estate leases.
Stock-based Compensation On December 31, 2024 , the Company had outstanding stock options, performance shares, RSUs and SARs awarded under its 2011 Incentive Compensation Plan (2011 Plan) and 2022 Equity Incentive Compensation Plan (2022 Plan). Equity incentive awards are granted to Company executives and other key employees. In addition, stock awards are granted to non-employee directors of the Company.
Stock-based Compensation On December 31, 2025 , the Company had outstanding stock options, performance shares, RSUs and SARs awarded under its 2011 Incentive Compensation Plan (2011 Plan) and 2022 Equity Incentive Compensation Plan (2022 Plan). Equity incentive awards are granted to Company executives and other key employees. In addition, stock awards are granted to non-employee directors of the Company.
A small percentage of the fixed income assets may be in debt securities that are below investment grade. The target allocation for fixed income is 78 percent. The fixed income portfolio has a duration similar to the plan’s liability stream and is designed to perform consistent with the movement of the plan’s liabilities.
A small percentage of the fixed income assets may be in debt securities that are below investment grade. The pension allocation for fixed income is 78 percent. The fixed income portfolio has a duration similar to the plan’s liability stream and is designed to perform consistent with the movement of the plan’s liabilities.
The income approach fair value calculations include estimates of long-term growth rates and discount rates that are commensurate with the risks and uncertainty inherent in the respective reporting units. The Company reported goodwill and other intangible assets impairment expenses during 2023 and goodwill impairment expenses during 2022.
The income approach fair value calculations include estimates of long-term growth rates and discount rates that are commensurate with the risks and uncertainty inherent in the respective reporting units. The Company reported goodwill and other intangible assets impairment expenses during 2023 and goodwill impairment expenses in 2025.
Fair Value Measurements The following were the financial instruments held by the Company at December 31, 2024 and 2023, and the methods and assumptions used to estimate the instruments’ fair values: Cash and cash equivalents Carrying value approximated fair value because of the short maturity of the instruments. Fair value of cash and cash equivalents is a Level 1 measurement.
Fair Value Measurements The following were the financial instruments held by the Company at December 31, 2025 and 2024, and the methods and assumptions used to estimate the instruments’ fair values: Cash and cash equivalents Carrying value approximated fair value because of the short maturity of the instruments. Fair value of cash and cash equivalents is a Level 1 measurement.
The Company does not consider the undistributed earnings of its Canadian subsidiary to be indefinitely reinvested in foreign operations to the extent of the subsidiary’s paid-up capital (PUC) as determined under Canadian tax law, which is used to determine tax-free distributions for Canadian tax purposes.
The Company did not consider the undistributed earnings of its Canadian subsidiary to be indefinitely reinvested in foreign operations to the extent of the subsidiary’s paid-up capital (PUC) as determined under Canadian tax law, which is used to determine tax-free distributions for Canadian tax purposes.
(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 2024 compared to 2023.
(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 2025 compared to 2024.
The remainder of the deferred compensation liability was tied to the chosen mutual fund investment assets. A $ 1.00 increase in the market price of the Company’s common stock will result in approximately $ 94,000 of additional compensation expense. A $ 1.00 reduction in the market price of the common stock will reduce compensation expense by a like amount.
The remainder of the deferred compensation liability was tied to the chosen mutual fund investment assets. A $ 1.00 increase in the market price of the Company’s common stock will result in approximately $ 46,000 of additional compensation expense. A $ 1.00 reduction in the market price of the common stock will reduce compensation expense by a like amount.
For more details, see Note 12, Deferred Compensation, of the notes to the Company’s consolidated financial statements (included in Item 8 of this Form 10-K). 50 Environmental Expenditures Environmental expenditures that relate to current operations are typically recorded in cost of sales.
For more details, see Note 12, Deferred Compensation, of the notes to the Company’s consolidated financial statements (included in Item 8 of this Form 10-K). 51 Environmental Expenditures Environmental expenditures that relate to current operations are typically recorded in cost of sales.
The fair values of the derivative instruments held by the Company on December 31, 2024, and December 31, 2023, are disclosed in Note 2, Fair Value Measurements , of the notes to the Company’s consolidated financial statements (included in Item 8 of this Form 10-K).
The fair values of the derivative instruments held by the Company on December 31, 2025, and December 31, 2024, are disclosed in Note 2, Fair Value Measurements , of the notes to the Company’s consolidated financial statements (included in Item 8 of this Form 10-K).
The implementation of ASU No. 2024-03 will not have an impact on the Company’s financial position, results of operations and cash flow but will impact the Company’s interim and annual disclosures related to the relevant subtopics in this update. 53 2.
The implementation of ASU No. 2024-03 will not have an impact on the Company’s financial position, results of operations and cash flow but will impact the Company’s interim and annual disclosures related to the relevant subtopics in this update.
The Company’s credit agreement (the Credit Agreement) with a syndicate of banks provides for credit facilities in an initial aggregate principal amount of $450.0 million, consisting of (a) a $350.0 million multi-currency revolving credit facility and (b) a $100.0 million delayed draw term loan credit facility ($10.0 million of the term loan principal has been permanently repaid as scheduled), each of which matures on June 24, 2027.
The Company’s credit agreement (the Credit Agreement) with a syndicate of banks provides for credit facilities in an initial aggregate principal amount of $450.0 million, consisting of (a) a $350.0 million multi-currency revolving credit facility and (b) a $100.0 million delayed draw term loan credit facility ($16.2 million of the term loan principal has been permanently repaid as scheduled), each of which matures on June 24, 2027.
See Item 3. Legal Proceedings , in this Form 10-K and Note 16, Contingencies , in the notes to the Company’s consolidated financial statements (included in Item 8 of this Form 10-K) for a summary of the significant environmental proceedings related to certain sites.
Legal Proceedings , in this Form 10-K and Note 16, Contingencies , in the notes to the Company’s consolidated financial statements (included in Item 8 of this Form 10-K) for a summary of the significant environmental proceedings related to certain sites.
In all Company locations, approximately 85 percent of union and non-union employees are eligible for either the Company’s sponsored or statutory profit sharing contributions and 100 percent of U.S. based union and non-union employees are eligible for the Company’s sponsored profit sharing contribution. 71 14.
In all Company locations, approximately 85 percent of union and non-union employees are eligible for either the Company’s sponsored or statutory profit sharing contributions and 100 percent of U.S. based union and non-union employees are eligible for the Company’s sponsored profit sharing contribution. 75 14.
In 2022, 2023 and 2024, profit sharing contributions for U.S. employees were made to the ESOP trust. Profit sharing contributions are allocated to participant accounts on the basis of participant base earnings.
In 2023, 2024 and 2025, profit sharing contributions for U.S. employees were made to the ESOP trust. Profit sharing contributions are allocated to participant accounts on the basis of participant base earnings.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 27, 2025 , expressed an unqualified opinion on the Company’s internal control over financial reporting.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 26, 2026 , expressed an unqualified opinion on the Company’s internal control over financial reporting.
No single customer comprised more than 10 percent of the Company’s consolidated net sales in 2024, 2023 or 2022. The Company maintains allowances for potential credit losses.
No single customer comprised more than 10 percent of the Company’s consolidated net sales in 2025, 2024 or 2023. The Company maintains allowances for potential credit losses.
(2) Operating expenses allocated to reportable segments are comprised of selling, administrative and research and development expenses. CODM uses operating expenses balances in its aggregate to analyze the performance of each reportable segment.
(2) Operating expenses allocated to reportable segments are comprised of selling, administrative and research and development expenses. The CODM uses operating expenses balances in their aggregate to analyze the performance of each reportable segment.
Presentation of Information The discussion that follows includes a comparison of the Company’s results of operations and liquidity and capital resources for the fiscal years ended December 31, 2023 and 2024.
Presentation of Information The discussion that follows includes a comparison of the Company’s results of operations and liquidity and capital resources for the fiscal years ended December 31, 2024 and 2025.
Plans The overall expected long-term rate of return on assets of 5.50 percent that was used to develop the 2024 pension expense is based on plan asset allocation, capital markets forecasts and expected benefits of active investment management. For fixed income, the expected return is 5.36 percent. This assumption includes the yield on the five-year zero-coupon U.S.
Plans The overall expected long-term rate of return on assets of 5.50 percent that was used to develop the 2025 pension expense is based on plan asset allocation, capital markets forecasts and expected benefits of active investment management. For fixed income, the expected return is 5.24 percent. This assumption includes the yield on the five-year zero-coupon U.S.
A distribution from any of these subsidiaries should not result in any significant foreign taxes to the extent of the distribution limitations discussed above and therefore, the Company 61 has not recognized a deferred tax liability for these undistributed earnings as of December 31, 2024.
A distribution from any of these subsidiaries should not result in any significant foreign taxes to the extent of the distribution limitations discussed above and therefore, the Company has not recognized a deferred tax liability for these undistributed earnings as of December 31, 2025.
The charges were recorded on the Administrative Expenses line on the Consolidated Statements of Income for the twelve months ended December 31, 2024. These charges were not allocated to any of the Company's three reportable segments. This incident did not have a material impact on the Company's business, financial position, results of operations and cash flow. 81 Item 9.
The charges were recorded on the Administrative Expenses line on the Consolidated Statements of Income for the twelve months ended December 31, 2024. These charges were not allocated to any of the Company's three reportable segments. This incident did not have a material impact on the Company's business, financial position, results of operations and cash flow. 25.
Leases The Company’s operating leases are primarily comprised of real estate, railcar, storage tank, warehouse, auto, trailer and manufacturing/office equipment leases. Real estate and railcars comprise approximately 47 percent and 36 percent, respectively, of the Company’s consolidated right of use (ROU) asset balance. Except for real estate, typical lease terms range from one to ten years .
Leases The Company’s operating leases are primarily comprised of real estate, railcar, storage tank, warehouse, auto, trailer and manufacturing/office equipment leases. Real estate and railcars comprise approximately 39 percent and 46 percent, respectively, of the Company’s consolidated right of use (ROU) asset balance. Except for real estate, typical lease terms range from one to ten years .
The overall business is comprised of three reportable segments: Surfactants - Surfactants, which accounted for 70 percent of the Company’s consolidated net sales in 2024, 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.
The overall business is comprised of three reportable segments: Surfactants - Surfactants, which accounted for 71 percent of the Company’s consolidated net sales in 2025, are principal ingredients in consumer and industrial cleaning and disinfection products such as detergents for washing clothes, dishes, carpets, floors and walls, as well as shampoos and body washes.
The amount of unrecognized tax benefits that, if recognized, would favorably affect the Company’s effective income tax rate in any future periods, net of the federal benefit on state issues, was approximately $ 16,767,000 , $ 14,056,000 and $ 10,172,000 at December 31, 2024, 2023 and 2022, respectively.
The amount of unrecognized tax benefits that, if recognized, would favorably affect the Company’s effective income tax rate in any future periods, net of the federal benefit on state issues, was approximately $ 10,819,000 , $ 16,767,000 and $ 14,056,000 at December 31, 2025, 2024 and 2023, respectively.
Based on the Company’s present knowledge with respect to its involvement at these sites, the possibility of other viable entities’ responsibilities for cleanup, and the extended period over which any costs would be incurred, management believes that the 72 Company has no material liability at these sites and that these matters, individually and in the aggregate, will not have a material effect on the Company’s financial position.
Based on the Company’s present knowledge with respect to its involvement at these sites, the possibility of other viable entities’ responsibilities for cleanup, and the extended period over which any costs would be incurred, management believes that the Company has no material liability at these sites and that these matters, individually and in the aggregate, will not have a material effect on the Company’s financial position. 33 See Item 3.
For amounts reclassified out of AOCI into earnings for the years ended December 31, 2024, 2023 and 2022, see Note 19, Accumulated Other Comprehensive Income (Loss ), of the notes to the Company’s consolidated financial statements (included in Item 8 of this Form 10-K). 55 4.
For amounts reclassified out of AOCI into earnings for the years ended December 31, 2025, 2024 and 2023, see Note 19, Accumulated Other Comprehensive Income (Loss ), of the notes to the Company’s consolidated financial statements (included in Item 8 of this Form 10-K). 56 4.
Over the years, the Company has received requests for information related to or has been named by the government as a potentially responsible party at a number of waste disposal sites where cleanup costs have been or may be incurred under CERCLA and similar state or foreign statutes.
Over the years, the Company has received requests for information related to or has been named by the government authorities as a potentially responsible party at a number of sites where cleanup costs have been or may be incurred by the Company under CERCLA and similar state statutes.
Because the Company has agreed to fixed prices for the noted quantity of natural gas, a hypothetical 10 percent fluctuation in the price of natural gas would cause the Company’s actual natural gas cost to be $0.1 million higher or lower than the cost at market price. 37 It em 8.
Because the Company has agreed to fixed prices for the noted quantity of natural gas, a hypothetical 10 percent fluctuation in the price of natural gas would cause the Company’s actual natural gas cost to be $0.2 million higher or lower than the cost at market price. 38 It em 8.
Stock Awards In 2024 and 2023, the Company granted stock awards under the 2022 Plan. The Company grants stock awards to employees in the form of performance shares and RSUs.
Stock Awards In 2025 and 2024, the Company granted stock awards under the 2022 Plan. The Company grants stock awards to employees in the form of performance shares and RSUs.
The following table presents the period-end Company common stock market prices used in the computation of deferred compensation income/expense in 2024, 2023 and 2022: December 31 2024 2023 2022 2021 Company Stock Price $ 64.70 $ 94.55 $ 106.46 $ 124.29 Liquidity and Capital Resources Overview Historically, the Company’s principal sources of liquidity have included cash flows from operating activities, available cash and cash equivalents and the proceeds from debt issuance and borrowings under credit facilities.
The following table presents the period-end Company common stock market prices used in the computation of deferred compensation income/expense in 2025, 2024 and 2023: December 31 2025 2024 2023 2022 Company Stock Price $ 47.36 $ 64.70 $ 94.55 $ 106.46 Liquidity and Capital Resources Overview Historically, the Company’s principal sources of liquidity have included cash flows from operating activities, available cash and cash equivalents and the proceeds from debt issuance and borrowings under credit facilities.
For a discussion of changes from the fiscal year ended December 31, 2022 to the fiscal year ended December 31, 2023, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (filed February 29, 2024).
For a discussion of changes from the fiscal year ended December 31, 2023 to the fiscal year ended December 31, 2024, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (filed February 27, 2025).
The actual tax benefit realized for the tax deductions from stock option exercises totaled $ 811,000 , $ 330,000 , and $ 36,000 for the years ended December 31, 2024, 2023 and 2022, respectively. SARs At December 31, 2024 , the Company had stock-settled SARs outstanding. SARs granted prior to 2017 cliff vested after two years .
The actual tax benefit realized for the tax deductions from stock option exercises totaled $ 2,000 , $ 811,000 , and $ 330,000 for the years ended December 31, 2025, 2024 and 2023, respectively. SARs At December 31, 2025 , the Company had stock-settled SARs outstanding. SARs granted prior to 2017 cliff vested after two years .
(3) Unallocated corporate expenses are primarily comprised of corporate administrative expenses (e.g., corporate finance, legal, human resources, information technology and environmental remediation expenses), deferred compensation and business restructuring and assets impairment expenses that are not included in segment operating income and not used to evaluate segment performance.
(3) Unallocated corporate expenses are primarily comprised of corporate administrative expenses (e.g., corporate finance, legal, human resources and information technology), environmental remediation expenses, deferred compensation, business restructuring, assets and goodwill impairment expenses and gain on sales of assets that are not included in segment operating income and not used to evaluate segment performance.
The pretax effect of all deferred compensation-related activities (including realized and unrealized gains and losses on the mutual fund assets held to fund deferred compensation obligations) and the income statement line items in which the effects of the activities were recorded are displayed in the following tables: Income (Expense) For the Year Ended December 31, (In millions) 2024 2023 Change Deferred Compensation (Administrative expenses) $ (2.2 ) $ (4.4 ) $ 2.2 (1) Investment Income (Other, net) 1.3 0.8 0.5 Realized/Unrealized Gains on Investments (Other, net) 3.3 4.3 (1.0 ) Pretax Income Effect $ 2.4 $ 0.7 $ 1.7 23 Income (Expense) For the Year Ended December 31, (In millions) 2023 2022 Change Deferred Compensation (Administrative expenses) $ (4.4 ) $ 9.4 $ (13.8 ) (1) Investment Income (Other, net) 0.8 1.7 (0.9 ) Realized/Unrealized Gains (Losses) on Investments (Other, net) 4.3 (8.0 ) 12.3 Pretax Income Effect $ 0.7 $ 3.1 $ (2.4 ) (1) See the Segment Results – Corporate Expenses section of this MD&A for details regarding the period-over-period changes in deferred compensation.
The pretax effect of all deferred compensation-related activities (including realized and unrealized gains and losses on the mutual fund assets held to fund deferred compensation obligations) and the income statement line items in which the effects of the activities were recorded are displayed in the following tables: Income (Expense) For the Year Ended December 31, (In millions) 2025 2024 Change Deferred Compensation (Operating expenses) $ (2.2 ) $ (2.2 ) $ — (1) Investment Income (Other, net) 0.9 1.3 (0.4 ) Realized/Unrealized Gains on Investments (Other, net) 1.9 3.3 (1.4 ) Pretax Income Effect $ 0.6 $ 2.4 $ (1.8 ) Income (Expense) For the Year Ended December 31, (In millions) 2024 2023 Change Deferred Compensation (Operating expenses) $ (2.2 ) $ (4.4 ) $ 2.2 (1) Investment Income (Other, net) 1.3 0.8 0.5 Realized/Unrealized Gains on Investments (Other, net) 3.3 4.3 (1.0 ) Pretax Income Effect $ 2.4 $ 0.7 $ 1.7 (1) See the Segment Results – Corporate Expenses section of this MD&A for details regarding the period-over-period changes in deferred compensation.
The Company believes it was in compliance with the covenants under its material debt agreements as of December 31, 2024.
The Company believes it was in compliance with the covenants under its material debt agreements as of December 31, 2025.
The total income tax benefit recognized in the income statement for share-based compensation arrangements was $ 1,323,000 , $ 1,452,000 , and $ 3,537,000 for the years ended December 31, 2024, 2023 and 2022, respectively. Stock Options Stock option awards are granted with an exercise price equal to the market price of the Company’s stock at the date of grant.
The total income tax benefit recognized in the income statement for share-based compensation arrangements was $ 1,477,000 , $ 1,323,000 , and $ 1,452,000 for the years ended December 31, 2025, 2024 and 2023, respectively. Stock Options Stock option awards are granted with an exercise price equal to the market price of the Company’s stock at the date of grant.
Financial Statements and Supplementary Data The following statements and data are included in this item: Report of Independent Registered Public Accounting Firm (PCAOB ID Number 34 ) 38 Consolidated Statements of Income (For years ended December 31, 2024, 2023 and 2022) 40 Consolidated Statements of Comprehensive Income (For years ended December 31, 2024, 2023 and 2022) 41 Consolidated Balance Sheets (December 31, 2024 and 2023) 42 Consolidated Statements of Cash Flow (For years ended December 31, 2024, 2023 and 2022) 43 Consolidated Statements of Stockholders’ Equity (For years ended December 31, 2024, 2023 and 2022) 44 Notes to Consolidated Financial Statements 47 Report of Independent Regist ered Public Accounting Firm To the stockholders and the Board of Directors of Stepan Company Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Stepan Company and subsidiaries (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows, for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”).
Financial Statements and Supplementary Data The following statements and data are included in this item: Report of Independent Registered Public Accounting Firm (PCAOB ID Number 34 ) 39 Consolidated Statements of Income (For years ended December 31, 2025, 2024 and 2023) 41 Consolidated Statements of Comprehensive Income (For years ended December 31, 2025, 2024 and 2023) 42 Consolidated Balance Sheets (December 31, 2025 and 2024) 43 Consolidated Statements of Cash Flow (For years ended December 31, 2025, 2024 and 2023) 44 Consolidated Statements of Stockholders’ Equity (For years ended December 31, 2025, 2024 and 2023) 45 Notes to Consolidated Financial Statements 48 Report of Independent Regist ered Public Accounting Firm To the stockholders and the Board of Directors of Stepan Company Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Stepan Company and subsidiaries (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows, for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”).
The redemption yield at the measurement date on U.K. government fixed interest bonds and the yield on corporate bonds are used as proxies for the return on the debt portfolio. The returns for equities and property are estimated as a premium of 3.0 percent added to the risk-free rate. Cash is assumed to have a long-term return of 4.75 percent.
The redemption yield at the measurement date on U.K. government fixed interest bonds and the yield on corporate bonds are used as proxies for the return on the debt portfolio. The returns for equities and property are estimated as a premium of 1.8 percent added to the risk-free rate. Cash is assumed to have a long-term return of 3.8 percent.
Market risk was estimated as the potential increase to the fair value that would result from a hypothetical 10 percent decrease in the Company’s weighted average long-term borrowing rates as of December 31, 2024, or $4.9 million.
Market risk was estimated as the potential increase to the fair value that would result from a hypothetical 10 percent decrease in the Company’s weighted average long-term borrowing rates as of December 31, 2025, or $4.8 million.
At December 31, 2024, and December 31, 2023 , the trust asset balances and the supplemental plan liability balances were $ 472,000 and $ 450,000 , respectively. Certain foreign locations are required by law to make profit sharing contributions to employees based on statutory formulas.
At December 31, 2025, and December 31, 2024 , the trust asset balances and the supplemental plan liability balances were $ 276,000 and $ 472,000 , respectively. Certain foreign locations are required by law to make profit sharing contributions to employees based on statutory formulas.
Within the range of possible environmental losses and legal losses, management has currently concluded that no single amount is more likely to occur than any other amounts in the range and, thus, has accrued at the lower end of the range. These accruals totaled $ 19,952,000 at December 31, 2024 and $ 20,646,000 at December 31, 2023.
Within the range of possible environmental losses and legal losses, management has currently concluded that no single amount is more likely to occur than any other amounts in the range and, thus, has accrued at the lower end of the range. These accruals totaled $ 19,272,000 at December 31, 2025 and $ 19,952,000 at December 31, 2024 .
The Company recognized $ 688,000 of revenue in 2024 from pre-existing contract liabilities at December 31, 2023 . During 2020 the Company recorded $ 10,709,000 of long-term deferred revenue associated with a payment received to defray the cost of capital expenditures necessary to service a customer’s future product needs.
The Company recognized $ 689,000 of revenue in 2025 from pre-existing contract liabilities at December 31, 2024. In addition, during 2020 the Company recorded $ 10,709,000 of long-term deferred revenue associated with a payment received to defray the cost of capital expenditures necessary to service a customer’s future product needs.
The fair value for each SARs award was estimated using the Black-Scholes valuation model incorporating the same assumptions as noted for stock options. At December 31, 2024 , there was $ 2,438,000 of total unrecognized compensation cost related to all unvested SARs. That cost is to be recognized over a weighted-average period of 1.8 years.
The fair value for each SARs award was estimated using the Black-Scholes valuation model incorporating the same assumptions as noted for stock options. At December 31, 2025 , there was $ 2,602,000 of total unrecognized compensation cost related to all unvested SARs. That cost is to be recognized over a weighted-average period of 1.9 years.
Below are the year-end Company common stock market prices used in the computation of deferred compensation income and expense: December 31 2024 2023 2022 2021 Company Stock Price $ 64.70 $ 94.55 $ 106.46 $ 124.29 Effects of Foreign Currency Translation The Company’s foreign subsidiaries transact business and report financial results in their respective local currencies.
Below are the year-end Company common stock market prices used in the computation of deferred compensation income and expense: December 31 2025 2024 2023 2022 Company Stock Price $ 47.36 $ 64.70 $ 94.55 $ 106.46 Effects of Foreign Currency Translation The Company’s foreign subsidiaries transact business and report financial results in their respective local currencies.
These expenses are aimed at the discovery of new knowledge with the intent that such effort will be useful in developing and commercializing a new product or in bringing about a significant improvement to an existing product or process. Total research and development expenses were $ 33,544,000 , $ 35,732,000 , and $ 40,902,000 in 2024, 2023 and 2022, respectively.
These expenses are aimed at the discovery of new knowledge with the intent that such effort will be useful in developing and commercializing a new product or in bringing about a significant improvement to an existing product or process. Total research and development expenses were $ 34,799,000 , $ 33,544,000 , and $ 35,732,000 in 2025, 2024 and 2023, respectively.
Derivative instrument gains and losses for the years ended December 31, 2024, 2023 and 2022, were immaterial.
Derivative instrument gains and losses for the years ended December 31, 2025, 2024 and 2023, were immaterial.
These models include factors such as the interest rate on the coupon, maturity, rating, cash flow projections and other factors. Level 3 – no investments held during 2024 or 2023 were categorized as Level 3. 69 U.K.
These models include factors such as the interest rate on the coupon, maturity, rating, cash flow projections and other factors. Level 3 – no investments held during 2025 or 2024 were categorized as Level 3. 73 U.K.
As of December 31, 2024 , the Company had $ 689,000 of contract liabilities and no contract assets. A contract liability would typically arise when an advance or deposit is received from a customer before the Company recognizes revenue.
As of December 31, 2025 , the Company had $ 218,000 of contract liabilities and no contract assets. A contract liability would typically arise when an advance or deposit is received from a customer before the Company recognizes revenue.
The Company uses forward contracts to mitigate the exposure of certain foreign currency transactions and balances to fluctuating exchange rates. At December 31, 2024, the Company had forward contracts with an aggregated notional amount of $149.6 million. Except for the Company’s subsidiaries in Argentina, Brazil, China and Colombia, foreign currency exposures are substantially hedged by forward contracts.
The Company uses forward contracts to mitigate the exposure of certain foreign currency transactions and balances to fluctuating exchange rates. At December 31, 2025, the Company had forward contracts with an aggregated notional amount of $57.8 million. Except for the Company’s subsidiaries in Argentina, Brazil, China and Colombia, foreign currency exposures are substantially hedged by forward contracts.
As of December 31, 2024 and 2023, the Company had valuation allowances of $ 764,000 and $ 853,000 , respectively, which were attributable to deferred tax assets in Canada, India and the Philippines. The realization of deferred tax assets is dependent on the generation of sufficient taxable income in the appropriate tax jurisdictions.
As of December 31, 2025 and 2024, the Company had valuation allowances of $ 776,000 and $ 764,000 , respectively, which were attributable to deferred tax assets in Argentina, Canada, India and the Philippines. The realization of deferred tax assets is dependent on the generation of sufficient taxable income in the appropriate tax jurisdictions.
P olymers - Polymers, which accounted for 27 percent of consolidated net sales in 2024, 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).
Polymers - Polymers, which accounted for 25 percent of consolidated net sales in 2025, include polyurethane polyols, polyester resins and phthalic anhydride. Polyurethane polyols are used in the manufacture of rigid foam for thermal insulation in the construction industry and are also a base raw material for coatings, adhesives, sealants and elastomers (collectively, CASE products).
For the years ended December 31, 2024, 2023 and 2022 , the Company recognized $ 298,000 , $ 480,000 and $ 421,000 , respectively, of statutory profit sharing expense that is included in the table above.
For the years ended December 31, 2025, 2024 and 2023 , the Company recognized $ 138,000 , $ 298,000 and $ 480,000 , respectively, of statutory profit sharing expense that is included in the table above.
The Company does not believe that the amount of unrecognized tax benefits related to its current uncertain tax positions will change significantly over the next 12 months. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense.
The Company does not believe that the amount of unrecognized tax benefits related to its current uncertain tax positions will change significantly over the next 12 months unless certain statute of limitations expire. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense.
That cost is expected to be recognized over a weighted-average period of 1.8 years. Cash received from stock option exercises under the Company’s stock option plans for the years ended December 31, 2024, 2023, and 2022 was $ 1,112,000 , $ 2,795,000 , and $ 782,000 , respectively.
That cost is expected to be recognized over a weighted-average period of 1.7 years. Cash received from stock option exercises under the Company’s stock option plans for the years ended December 31, 2025, 2024, and 2023 was $ 104,000 , $ 1,112,000 , and $ 2,795,000 , respectively.
The above table does not include $29.6 million of other non-current liabilities recorded on the balance sheet at December 31, 2024, as summarized in Note 15, Other Non-Current Liabilities, of the notes to the Company’s consolidated financial statements (included in Item 8 of this Form 10-K).
The above table does not include $17.4 million of other non-current liabilities recorded on the balance sheet at December 31, 2025, as summarized in Note 15, Other Non-Current Liabilities, of the notes to the Company’s consolidated financial statements (included in Item 8 of this Form 10-K).
Weighted-average remaining lease term-operating leases 8 Years Weighted-average discount rate-operating leases 3.9 % 8.
Weighted-average remaining lease term - operating leases 6 Years Weighted-average discount rate - operating leases 3.8 % 8.
(2) Includes net property, plant and equipment, goodwill and other intangible assets. 77 18.
(2) Includes net property, plant and equipment, goodwill and other intangible assets. 81 18.
As of December 31, 2024, the potential reduction in the Company’s earnings resulting from the impact of hypothetical adverse changes in exchange rates on the fair value of its outstanding foreign currency contracts of 10 percent for all currencies would have been $3.7 million.
As of December 31, 2025, the potential reduction in the Company’s earnings resulting from the impact of hypothetical adverse changes in exchange rates on the fair value of its outstanding foreign currency contracts of 10 percent for all currencies would have been $4.2 million.
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