Stepan Company

Greetings and welcome to the Q1 2020 earnings release conference call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question and answer session. At that time, if you have a question, please press star followed by the number one on your telephone. If at any time during the conference you need to reach an operator, please press star zero. As a reminder, this conference is being recorded Tuesday, April 21st, 2020. Your speakers for today are Luis Rojo. I would now like to turn the conference over to Mr. Luis Rojo. Please go ahead, sir.

Good morning, and thank you for joining Stepan Company's first quarter 2020 financial review. Before we begin, please note that information in this conference call contains forward-looking statements, which are not historical facts. These statements involve risks and uncertainties that could cause actual results to differ materially, including but not limited to prospects for our foreign operations, global and regional economic conditions, and factors detailing our Security and Exchange Commission filings. Whether you're joining us online or over the phone, we encourage you to review the investor slide presentation, which we have made available at www.stepan.com under the investor relations section of our website. We make these slides available at approximately the same time and when the earnings releases issue. And we hope that you find the information and perspective helpful. Now with that, I would like to turn the call over to Mr. Quinn Stepan, our chairman, president, and chief executive officer.

Thank you, Luis. Good morning. And thank you all for joining us. Today we are living in a difficult and uncertain world. We are all concerned about our health and the health of those we love. Many people have lost their jobs and are fearful as to how they will support themselves. At Stepan, we are very fortunate that many of the products we sell contribute to the fight against the coronavirus. Our plants are running, and most importantly, We have been able to keep our people employed and healthy. We have supported local first responders including Chicago police and fire stations with free hand sanitizer and disinfecting products. We are grateful to all of our employees for their commitment to make our world healthier. Now, let me provide an overview of our first quarter performance. Given the global pandemic and the impact of the power outage at our Millsdale facility, we actually had a pretty good quarter. First quarter adjusted net income was $24.2 million or $1.04 per diluted share versus $30.6 million or $1.31 per diluted share in the prior year. Including the estimated impact of the Millsdale power outage, For which we have insurance, adjusted net income would have been up versus the prior year. Compact and operating income benefited from strong volumes in the global consumer product end markets driven by higher demand for cleaning and disinfection products as a result of COVID-19. Functional product volumes were down. Mexican operations delivered strong year-over-year earnings growth. Polymer operating income was down due to the power outage of Millsdale and significantly lower thalic and hydride volumes. Global rigid polyol volumes were flat as growth in North America and China was offset by lower demand in Europe due to COVID-19. Our specialty product business results were higher due to improved volume and margins within our medium chain triglyceride product line. driven by strong demand and pantry loading in the infant nutrition market as a result of the COVID-19 outbreak. Our Board of Directors declared a quarterly cash dividend on Stepan's common stock of 27.5 cents per share payable on June 15, 2020. At this point, I'd like Luis to walk through a few more details about our first quarter results.