Stepan Company

Greetings and welcome to the Steppen Company third quarter 2022 results. During the presentation, all participants will be in the listen-only mode. Afterwards, we will 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 Wednesday, October 19, 2022. I will now turn the conference over to Luis Rojo, Vice President and Chief Financial Officer. Please go ahead.

Luis Rojo Good morning, and thank you for joining the Stepan Company Third Quarter 2022 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, prospects for our foreign operations, global and regional economic conditions, and factors detailing our security and exchange commission filing. Whether you are 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 you find the informational perspective helpful. With that, I would like to turn the call over to Mr. Scott Behrens, our President and Chief Executive Officer.

Scott Behrens Good morning, and thank you for joining us today to discuss our third quarter results. To begin, I will share our third quarter highlights and strategy outlook, and Luis will provide additional details on our financial results for the quarter. The third quarter continued to be a challenging operating environment, given continued raw material constraints, the energy crisis in Europe, cost inflation, foreign currency exchange impacts from a stronger US dollar, and overall global macroeconomic uncertainties. Nonetheless, I am proud of how our team has continued to overcome these challenges by delivering record results for the third quarter. Reported net income reached a record $39.4 million, or $1.71 per diluted share, while adjusted net income was a record of $46.3 million, or $2.01 per diluted share. So, in fact, an operating income was $39.0 million compared to $34.5 million in the prior year quarter. Growth was mainly driven by a better product and customer mix, partially offset by an 8 percent decline in global volume. Our polymer segment reached a record operating income of $31.9 million compared to $19.8 million in the prior year, which represents a 61 percent increase driven by margin recovery and improved mix. Our specialty product segment also had a record quarter, growing operating income to $9.7 million representing a $7.3 million increase over prior year. Our board of directors declared a quarterly cash dividend on Steppen's common stock of 36.5 cents per share, payable on December 15th, 2022. This represents a 9% increase in our dividend, and Steppen has paid and increased its dividend for 55 consecutive years. During the third quarter of 2022, the company paid $7.5 million of dividends to shareholders and repurchased $5.3 million of company stock. During the first nine months of 2022, the company paid $22.5 million in dividends and repurchased $22.3 million of company stock. The company still has $127.7 million remaining under our share repurchase program. Looking forward, we believe the operational environment will remain challenging. However, we are confident that we can deliver another record year. At this point, I would like Luis to walk through a few more details about our third quarter results.