What changed in STEPAN CO's 10-K — 2024 vs 2025
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Paragraph-level year-over-year comparison of STEPAN CO's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.
+383 added−360 removedSource: 10-K (2026-02-26) vs 10-K (2025-02-27)
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
Biggest changeBased 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.
Biggest changeThe 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.
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.
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
Biggest changeIn addition, we tested payments made on the remediation of environmental contamination. If the Company’s reasonable estimate of loss for a remediation site is a range, we evaluated whether the amount of the liability recognized by the Company within that range was reasonable based on the facts and circumstances specific to the remediation site. We evaluated the Company’s environmental contingencies disclosures for consistency with our knowledge of the Company’s environmental matters. /s/ Deloitte & Touche LLP DELOITTE & TOUCHE LLP Chicago, Illinois February 27, 2025 We have served as the Company’s auditor since 2002. 39 Stepan Company Consol idated Statements of Income For the years ended December 31, 2024, 2023 and 2022 (In thousands, except per share amounts) 2024 2023 2022 Net Sales (Note 1) $ 2,180,274 $ 2,325,768 $ 2,773,270 Cost of Sales 1,908,060 2,048,170 2,346,201 Gross Profit 272,214 277,598 427,069 Operating Expenses: Selling (Note 1) 45,628 48,367 59,030 Administrative (Note 1) 98,277 93,202 102,177 Research, development and technical services (Note 1) 55,674 59,039 66,633 Deferred compensation (income) expense (Note 12) 2,155 4,371 ( 9,393 ) 201,734 204,979 218,447 Goodwill and other intangibles impairment (Note 4) — 2,038 978 Business restructuring and assets impairment (Note 22) — 11,968 308 Operating Income 70,480 58,613 207,336 Other Income (Expense): Interest, net (Note 6) ( 14,182 ) ( 12,103 ) ( 9,809 ) Other, net (Note 8) 4,141 1,881 ( 8,824 ) ( 10,041 ) ( 10,222 ) ( 18,633 ) Income Before Provision for Income Taxes 60,439 48,391 188,703 Provision for Income Taxes (Note 9) \ 10,069 8,187 41,550 Net Income 50,370 40,204 147,153 Net Income Per Common Share (Note 18): Basic $ 2.21 $ 1.77 $ 6.46 Diluted $ 2.20 $ 1.75 $ 6.38 Shares Used to Compute Net Income Per Common Share (Note 18): Basic 22,832 22,777 22,781 Diluted 22,931 22,946 23,064 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. 40 Stepan Company Cons olidated Statements of Comprehensive Income For the years ended December 31, 2024, 2023 and 2022 (In thousands) 2024 2023 2022 Net Income $ 50,370 $ 40,204 $ 147,153 Other Comprehensive Income (Loss): Foreign currency translation adjustments (Note 19) ( 59,390 ) 40,423 ( 21,567 ) Defined benefit pension plans: Net actuarial gain (loss) arising in period (net of tax benefit of $ 2,044 , tax benefit of $ 508 and tax benefit of $ 894 for 2024, 2023 and 2022, respectively) ( 5,888 ) ( 1,630 ) ( 2,857 ) Amortization of prior service cost included in pension expense (net of tax expense of $ 2 , $ 2 and $ 3 for 2024, 2023 and 2022, respectively) 8 8 6 Amortization of actuarial loss included in pension expense (net of tax expense of $ 104 , $ 99 and $ 599 for 2024, 2023 and 2022, respectively) 292 293 1,794 Net defined benefit pension plan activity (Note 19) ( 5,588 ) ( 1,329 ) ( 1,057 ) Cash flow hedges: Cash flow hedge activity ( 1,249 ) ( 2,174 ) 8,357 Reclassifications to income in period ( 9 ) ( 10 ) ( 9 ) Net cash flow hedge activity (Note 19) ( 1,258 ) ( 2,184 ) 8,348 Other Comprehensive Income (Loss) ( 66,236 ) 36,910 ( 14,276 ) Comprehensive Income (Loss) ( 15,866 ) 77,114 132,877 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. 41 Stepan Company Co nsolidated Balance Sheets December 31, 2024 and 2023 (Dollars in thousands) 2024 2023 Assets Current Assets: Cash and cash equivalents $ 99,665 $ 129,823 Receivables, less allowances of $ 10,827 in 2024 and $ 11,143 in 2023 388,027 422,050 Inventories (Note 5) 288,722 265,558 Other current assets 34,015 34,452 Total current assets 810,429 851,883 Property, Plant and Equipment: Land 54,464 52,842 Buildings and improvements 399,226 335,033 Machinery and equipment 1,917,196 1,796,820 Construction in progress 275,045 400,363 2,645,931 2,585,058 Less: Accumulated depreciation ( 1,447,477 ) ( 1,378,393 ) Property, plant and equipment, net 1,198,454 1,206,665 Goodwill, net (Note 4) 91,368 97,442 Other intangible assets, net (Note 4) 42,673 52,571 Long-term investments (Note 2) 25,558 26,804 Operating lease assets (Note 7) 71,477 70,646 Other non-current assets 64,689 57,343 Total Assets $ 2,304,648 $ 2,363,354 Liabilities and Equity Current Liabilities: Current maturities of debt (Note 6) $ 292,807 $ 252,898 Accounts payable 258,787 233,031 Accrued liabilities (Note 14) 117,440 121,941 Total current liabilities 669,034 607,870 Deferred income taxes (Note 9) 9,612 10,373 Long-term debt, less current maturities (Note 6) 332,632 401,248 Non-current operating lease liability (Note 7) 57,392 58,026 Other non-current liabilities (Note 15) 66,044 69,347 Commitments and Contingencies (Note 16) Equity (Note 10): Common stock, $ 1 par value; 60,000,000 authorized shares; 27,156,436 issued shares in 2024 and 27,005,852 issued shares in 2023 27,156 27,006 Additional paid-in capital 253,779 247,032 Accumulated other comprehensive loss (Note 19) ( 196,838 ) ( 130,602 ) Retained earnings 1,273,886 1,257,466 Less: Common treasury stock, at cost, 4,655,798 shares in 2024 and 4,628,072 shares in 2023 ( 188,049 ) ( 184,412 ) Total Stepan Company stockholders’ equity 1,169,934 1,216,490 Total Liabilities and Equity $ 2,304,648 $ 2,363,354 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. 42 Stepan Company Con solidated Statements of Cash Flows For the years ended December 31, 2024, 2023 and 2022 (In thousands) 2024 2023 2022 Cash Flows From Operating Activities Net income $ 50,370 $ 40,204 $ 147,153 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 112,197 105,338 94,650 Deferred compensation 2,155 4,371 ( 9,393 ) Realized and unrealized (gains) losses on long-term investments ( 3,323 ) ( 4,314 ) 8,188 Stock-based compensation 5,347 5,741 13,851 Deferred income taxes ( 10,291 ) 18,303 ( 27,452 ) Goodwill and other intangibles impairment (Note 4) — 2,038 978 Other non-cash items 2,812 5,123 1,752 Changes in assets and liabilities, excluding effects of acquisitions: Receivables, net 9,036 32,007 ( 26,153 ) Inventories ( 37,178 ) 144,846 ( 99,394 ) Other current assets ( 1 ) ( 4,528 ) ( 4,354 ) Accounts payable and accrued liabilities 33,970 ( 158,924 ) 54,173 Pension liabilities ( 131 ) ( 1,204 ) ( 1,821 ) Environmental and legal liabilities ( 695 ) ( 11,985 ) 9,547 Deferred revenues ( 2,215 ) ( 2,140 ) ( 962 ) Net Cash Provided By Operating Activities 162,053 174,876 160,763 Cash Flows From Investing Activities Expenditures for property, plant and equipment ( 122,776 ) ( 260,335 ) ( 301,553 ) Business acquisitions, net of cash acquired (Note 20) — — ( 9,693 ) Other, net 5,831 1,669 3,156 Net Cash Used In Investing Activities ( 116,945 ) ( 258,666 ) ( 308,090 ) Cash Flows From Financing Activities Revolving debt and bank overdrafts, net (Note 6) 19,886 104,717 186,551 Other debt borrowings (Note 6) — — 75,000 Other debt repayments (Note 6) ( 48,571 ) ( 37,858 ) ( 37,857 ) Dividends paid ( 33,950 ) ( 32,868 ) ( 30,573 ) Company stock repurchased — — ( 24,949 ) Stock option exercises 1,112 2,795 782 Other, net ( 2,997 ) ( 3,502 ) ( 2,745 ) Net Cash Provided By (Used In) Financing Activities ( 64,520 ) 33,284 166,209 Effect of Exchange Rate Changes on Cash ( 10,746 ) 6,579 ( 4,318 ) Net Increase (Decrease) in Cash and Cash Equivalents ( 30,158 ) ( 43,927 ) 14,564 Cash and Cash Equivalents at Beginning of Year 129,823 173,750 159,186 Cash and Cash Equivalents at End of Year $ 99,665 $ 129,823 $ 173,750 Supplemental Cash Flow Information Cash payments of income taxes, net of refunds $ ( 12,342 ) $ 29,558 $ 41,617 Cash payments of interest $ 29,848 $ 27,951 $ 16,526 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. 43 Stepan Company C onsolidated Statements of Equity For the year ended December 31, 2022 STEPAN COMPANY STOCKHOLDERS (In thousands, except share and per share amounts) Total Common Stock Additional Paid-in Capital Common Treasury Stock Accumulated Other Comprehensive Income (Loss) Retained Earnings Balance, December 31, 2021 $ 1,074,193 $ 26,761 $ 220,820 $ ( 153,702 ) $ ( 153,236 ) $ 1,133,550 Issuance of 11,888 shares of common stock under stock option plan 782 12 770 — — — Purchase of 251,120 shares of common stock ( 24,949 ) — — ( 24,949 ) — — Stock-based and deferred compensation 13,735 68 15,612 ( 1,945 ) — — Net income 147,153 — — — — 147,153 Other comprehensive income ( 14,276 ) — — — ( 14,276 ) — Cash dividends paid: Common stock ($ 1.370 per share) ( 30,573 ) — — — — ( 30,573 ) Balance, December 31, 2022 $ 1,166,065 $ 26,841 $ 237,202 $ ( 180,596 ) $ ( 167,512 ) $ 1,250,130 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. 44 Stepan Company Consolidated Statements of Equity For the year ended December 31, 2023 STEPAN COMPANY STOCKHOLDERS (In thousands, except share and per share amounts) Total Common Stock Additional Paid-in Capital Common Treasury Stock Accumulated Other Comprehensive Income (Loss) Retained Earnings Balance, December 31, 2022 $ 1,166,065 $ 26,841 $ 237,202 $ ( 180,596 ) $ ( 167,512 ) $ 1,250,130 Issuance of 52,999 shares of common stock under stock option plan 2,875 53 2,822 — — — Stock-based and deferred compensation 3,304 112 7,008 ( 3,816 ) — — Net income 40,204 — — — — 40,204 Other comprehensive income 36,910 — — — 36,910 — Cash dividends paid: Common stock ($ 1.470 per share) ( 32,868 ) — — — — ( 32,868 ) Balance, December 31, 2023 $ 1,216,490 $ 27,006 $ 247,032 $ ( 184,412 ) $ ( 130,602 ) $ 1,257,466 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. 45 Stepan Company Consolidated Statements of Equity For the year ended December 31, 2024 STEPAN COMPANY STOCKHOLDERS (In thousands, except share and per share amounts) Total Common Stock Additional Paid-in Capital Common Treasury Stock Accumulated Other Comprehensive Income (Loss) Retained Earnings Balance, December 31, 2023 $ 1,216,490 $ 27,006 $ 247,032 $ ( 184,412 ) $ ( 130,602 ) $ 1,257,466 Issuance of 26,735 shares of common stock under stock option plan 1,135 27 1,108 — — — Stock-based and deferred compensation 2,125 123 5,639 ( 3,637 ) — — Net income 50,370 — — — — 50,370 Other comprehensive income ( 66,236 ) — — — ( 66,236 ) — Cash dividends paid: Common stock ($ 1.510 per share) ( 33,950 ) — — — — ( 33,950 ) Balance, December 31, 2024 $ 1,169,934 $ 27,156 $ 253,779 $ ( 188,049 ) $ ( 196,838 ) $ 1,273,886 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. 46 Not es to Consolidated Financial Statements For the years ended December 31, 2024, 2023 and 2022 1.
Biggest changeWe also evaluated whether the estimated future cash flows were consistent with evidence obtained in other areas of the audit. /s/ Deloitte & Touche LLP DELOITTE & TOUCHE LLP Chicago, Illinois February 26, 2026 We have served as the Company’s auditor since 2002. 40 Stepan Company Consol idated Statements of Income For the years ended December 31, 2025, 2024 and 2023 (In thousands, except per share amounts) 2025 2024 2023 Net Sales (Note 1) $ 2,332,114 $ 2,180,274 $ 2,325,768 Cost of Sales 2,062,226 1,908,060 2,048,170 Gross Profit 269,888 272,214 277,598 Operating Expenses: Selling (Note 1) 48,767 45,628 48,367 Administrative (Note 1) 90,789 98,277 93,202 Research, development and technical services (Note 1) 59,278 55,674 59,039 Deferred compensation expense (Note 12) 2,155 2,155 4,371 200,989 201,734 204,979 Goodwill and other intangibles impairment (Note 4) 6,245 — 2,038 Business restructuring and assets impairment (Note 22) — — 11,968 Gain on sales of assets (Note 20) 15,895 — — Operating Income 78,549 70,480 58,613 Other Income (Expense): Interest, net (Note 6) ( 22,115 ) ( 14,182 ) ( 12,103 ) Other, net (Note 8) 3,470 4,141 1,881 ( 18,645 ) ( 10,041 ) ( 10,222 ) Income Before Provision for Income Taxes 59,904 60,439 48,391 Provision for Income Taxes (Note 9) \ 13,009 10,069 8,187 Net Income 46,895 50,370 40,204 Net Income Per Common Share (Note 18): Basic $ 2.05 $ 2.21 $ 1.77 Diluted $ 2.05 $ 2.20 $ 1.75 Shares Used to Compute Net Income Per Common Share (Note 18): Basic 22,872 22,832 22,777 Diluted 22,890 22,931 22,946 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. 41 Stepan Company Cons olidated Statements of Comprehensive Income For the years ended December 31, 2025, 2024 and 2023 (In thousands) 2025 2024 2023 Net Income $ 46,895 $ 50,370 $ 40,204 Other Comprehensive Income (Loss): Foreign currency translation adjustments (Note 19) 61,820 ( 59,390 ) 40,423 Defined benefit pension plans: Net actuarial (loss) arising in period (net of tax benefit of $ 438 , tax benefit of $ 2,044 and tax benefit of $ 508 for 2025, 2024 and 2023, respectively) ( 1,250 ) ( 5,888 ) ( 1,630 ) Amortization of prior service cost included in pension expense (net of tax expense of $ 3 , $ 2 and $ 2 for 2025, 2024 and 2023, respectively) 11 8 8 Amortization of actuarial loss included in pension expense (net of tax expense of $ 89 , $ 104 and $ 99 for 2025, 2024 and 2023, respectively) 253 292 293 Net defined benefit pension plan activity (Note 19) ( 986 ) ( 5,588 ) ( 1,329 ) Cash flow hedges: Cash flow hedge activity ( 2,960 ) ( 1,249 ) ( 2,174 ) Reclassifications to income in period ( 10 ) ( 9 ) ( 10 ) Net cash flow hedge activity (Note 19) ( 2,970 ) ( 1,258 ) ( 2,184 ) Other Comprehensive Income (Loss) 57,864 ( 66,236 ) 36,910 Comprehensive Income (Loss) 104,759 ( 15,866 ) 77,114 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. 42 Stepan Company Co nsolidated Balance Sheets December 31, 2025 and 2024 (Dollars in thousands) 2025 2024 Assets Current Assets: Cash and cash equivalents $ 132,688 $ 99,665 Receivables, less allowances of $ 10,533 in 2025 and $ 10,827 in 2024 387,959 388,027 Inventories (Note 5) 298,827 288,722 Other current assets 39,485 34,015 Total current assets 858,959 810,429 Property, Plant and Equipment: Land 58,403 54,464 Buildings and improvements 455,064 399,226 Machinery and equipment 2,160,665 1,917,196 Construction in progress 112,904 275,045 2,787,036 2,645,931 Less: Accumulated depreciation ( 1,567,409 ) ( 1,447,477 ) Property, plant and equipment, net 1,219,627 1,198,454 Goodwill, net (Note 4) 92,570 91,368 Other intangible assets, net (Note 4) 39,526 42,673 Long-term investments (Note 2) 21,270 25,558 Operating lease assets (Note 7) 62,494 71,477 Other non-current assets 63,256 64,689 Total Assets $ 2,357,702 $ 2,304,648 Liabilities and Equity Current Liabilities: Current maturities of debt (Note 6) $ 285,735 $ 292,807 Accounts payable 261,723 258,787 Accrued liabilities (Note 14) 119,036 117,440 Total current liabilities 666,494 669,034 Deferred income taxes (Note 9) 11,450 9,612 Long-term debt, less current maturities (Note 6) 340,975 332,632 Non-current operating lease liability (Note 7) 49,340 57,392 Other non-current liabilities (Note 15) 45,433 66,044 Commitments and Contingencies (Note 16) Equity (Note 10): Common stock, $ 1 par value; 60,000,000 authorized shares; 27,301,177 issued shares in 2025 and 27,156,436 issued shares in 2024 27,301 27,156 Additional paid-in capital 259,820 253,779 Accumulated other comprehensive loss (Note 19) ( 138,974 ) ( 196,838 ) Retained earnings 1,285,752 1,273,886 Less: Common treasury stock, at cost, 4,676,739 shares in 2025 and 4,655,798 shares in 2024 ( 189,889 ) ( 188,049 ) Total Stepan Company stockholders’ equity 1,244,010 1,169,934 Total Liabilities and Equity $ 2,357,702 $ 2,304,648 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. 43 Stepan Company Con solidated Statements of Cash Flows For the years ended December 31, 2025, 2024 and 2023 (In thousands) 2025 2024 2023 Cash Flows From Operating Activities Net income $ 46,895 $ 50,370 $ 40,204 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 126,041 112,197 105,338 Deferred compensation 2,155 2,155 4,371 Realized and unrealized (gains) on long-term investments ( 1,898 ) ( 3,323 ) ( 4,314 ) Stock-based compensation 5,999 5,347 5,741 Deferred income taxes ( 1,395 ) ( 10,291 ) 18,303 Goodwill and other intangibles impairment (Note 4) 6,245 — 2,038 Other non-cash items ( 14,124 ) 2,812 5,123 Changes in assets and liabilities, excluding effects of acquisitions: Receivables, net 23,722 9,036 32,007 Inventories 500 ( 37,178 ) 144,846 Other current assets ( 7,281 ) ( 1 ) ( 4,528 ) Accounts payable and accrued liabilities ( 32,713 ) 33,970 ( 158,924 ) Pension liabilities ( 2,896 ) ( 131 ) ( 1,204 ) Environmental and legal liabilities ( 680 ) ( 695 ) ( 11,985 ) Deferred revenues ( 2,688 ) ( 2,215 ) ( 2,140 ) Net Cash Provided By Operating Activities 147,882 162,053 174,876 Cash Flows From Investing Activities Expenditures for property, plant and equipment ( 122,514 ) ( 122,776 ) ( 260,335 ) Proceeds from sales of assets (Note 20) 26,587 — — Other, net 6,878 5,831 1,669 Net Cash Used In Investing Activities ( 89,049 ) ( 116,945 ) ( 258,666 ) Cash Flows From Financing Activities Revolving debt and bank overdrafts, net (Note 6) ( 10,901 ) 19,886 104,717 Other debt borrowings (Note 6) 75,000 — — Other debt repayments (Note 6) ( 62,857 ) ( 48,571 ) ( 37,858 ) Dividends paid ( 35,029 ) ( 33,950 ) ( 32,868 ) Stock option exercises 104 1,112 2,795 Other, net ( 1,757 ) ( 2,997 ) ( 3,502 ) Net Cash Provided By (Used In) Financing Activities ( 35,440 ) ( 64,520 ) 33,284 Effect of Exchange Rate Changes on Cash 9,630 ( 10,746 ) 6,579 Net Increase (Decrease) in Cash and Cash Equivalents 33,023 ( 30,158 ) ( 43,927 ) Cash and Cash Equivalents at Beginning of Year 99,665 129,823 173,750 Cash and Cash Equivalents at End of Year $ 132,688 $ 99,665 $ 129,823 Supplemental Cash Flow Information Cash payments of income taxes, net of refunds (Note 9) $ 8,499 $ ( 12,342 ) $ 29,558 Cash payments of interest $ 28,682 $ 29,848 $ 27,951 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. 44 Stepan Company C onsolidated Statements of Equity For the year ended December 31, 2023 STEPAN COMPANY STOCKHOLDERS (In thousands, except share and per share amounts) Total Common Stock Additional Paid-in Capital Common Treasury Stock Accumulated Other Comprehensive Income (Loss) Retained Earnings Balance, December 31, 2022 $ 1,166,065 $ 26,841 $ 237,202 $ ( 180,596 ) $ ( 167,512 ) $ 1,250,130 Issuance of 52,999 shares of common stock under stock option plan 2,875 53 2,822 — — — Stock-based and deferred compensation 3,304 112 7,008 ( 3,816 ) — — Net income 40,204 — — — — 40,204 Other comprehensive income 36,910 — — — 36,910 — Cash dividends paid: Common stock ($ 1.470 per share) ( 32,868 ) — — — — ( 32,868 ) Balance, December 31, 2023 $ 1,216,490 $ 27,006 $ 247,032 $ ( 184,412 ) $ ( 130,602 ) $ 1,257,466 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. 45 Stepan Company Consolidated Statements of Equity For the year ended December 31, 2024 STEPAN COMPANY STOCKHOLDERS (In thousands, except share and per share amounts) Total Common Stock Additional Paid-in Capital Common Treasury Stock Accumulated Other Comprehensive Income (Loss) Retained Earnings Balance, December 31, 2023 $ 1,216,490 $ 27,006 $ 247,032 $ ( 184,412 ) $ ( 130,602 ) $ 1,257,466 Issuance of 26,735 shares of common stock under stock option plan 1,135 27 1,108 — — — Stock-based and deferred compensation 2,125 123 5,639 ( 3,637 ) — — Net income 50,370 — — — — 50,370 Other comprehensive income ( 66,236 ) — — — ( 66,236 ) — Cash dividends paid: Common stock ($ 1.510 per share) ( 33,950 ) — — — — ( 33,950 ) Balance, December 31, 2024 $ 1,169,934 $ 27,156 $ 253,779 $ ( 188,049 ) $ ( 196,838 ) $ 1,273,886 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. 46 Stepan Company Consolidated Statements of Equity For the year ended December 31, 2025 STEPAN COMPANY STOCKHOLDERS (In thousands, except share and per share amounts) Total Common Stock Additional Paid-in Capital Common Treasury Stock Accumulated Other Comprehensive Income (Loss) Retained Earnings Balance, December 31, 2024 $ 1,169,934 $ 27,156 $ 253,779 $ ( 188,049 ) $ ( 196,838 ) $ 1,273,886 Issuance of 2,473 shares of common stock under stock option plan 104 2 102 — — — Stock-based and deferred compensation 4,242 143 5,939 ( 1,840 ) — — Net income 46,895 — — — — 46,895 Other comprehensive income 57,864 — — — 57,864 — Cash dividends paid: Common stock ($ 1.550 per share) ( 35,029 ) — — — — ( 35,029 ) Balance, December 31, 2025 $ 1,244,010 $ 27,301 $ 259,820 $ ( 189,889 ) $ ( 138,974 ) $ 1,285,752 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. 47 Not es to Consolidated Financial Statements For the years ended December 31, 2025, 2024 and 2023 1.
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.
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