Stepan Company

Greetings. Thank you for standing by. Welcome to the Stepan Company Q4 Full Year 2021 Earnings Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we'll conduct a question and answer session. At that time, if you have a question, please press the 1 followed by the 4 on your telephone. If at any time during the conference you need to reach an operator, please press star 0. As a reminder, this conference is being recorded Thursday, February 17, 2022. And now I'd like to turn the conference over to Luis Rojo, Vice President and Chief Financial Officer. Please go ahead.

Good morning, and thank you for joining Stepan Company's fourth quarter and full year 2021 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 risk 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 section of our website. We make these slides available at approximately the same time as when the earnings release is issued, and we hope that you find the perspective helpful. Now with that, I would like to turn the call over to Mr. Quinn Stepan, our chairman and chief executive officer.

Good morning. and thank you all for joining us today. 2021 was another difficult year for our world, our country, and our industry, as COVID-19 and weather events created employee, raw material, and transportation challenges that impacted global supply chains. At Steppen, our employees' commitment and our team's agility allowed us to mostly meet customer requirements and grow income while taking significant steps to build a better, stronger, more sustainable future. Our reported net income reached a record $138 million, or $5.92 per diluted share, while our adjusted net income was also a record at $143.5 million, or $6.16 per diluted share. These record results were achieved despite the challenges affecting our operations. The estimated negative impact of the supply chain disruptions in our operating income for the three business segments totaled $21 million during 2021. In addition, global demand decreased for cleaning, disinfection, and personal wash products versus the pandemic peak in 2020. This impact was partially offset by higher demand within the institutional cleaning and functional product end markets. Although our base polymer business was affected by supply chain disruptions, higher polymer results were driven by the INVISTA acquisition. Specialty product results were slightly ahead of those reported in 2020, but results were negatively impacted by raw material availability. Our board of directors declared a quarterly cash dividend on Steppen's common stock of 33 and a half cents per share payable on March 15th, 2022. Steppen has increased its dividend for 54 consecutive years. During 2021, we returned $45 million to our shareholders via dividends and share buybacks. This represents an increase of 11% versus 2020. As previously communicated, our board of directors authorized another $150 million of share repurchases. We remain confident in the strength and diversity of our business and its ability to generate cash that will allow us to invest in our current business, pursue strategic M&A opportunities, and return cash to our shareholders. At this point, I would like Luis to walk through a few more details about our fourth quarter and full year results.