Stepan Company

Good day, and thank you for standing by. Welcome to the seventh, fourth quarter, and full year earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference call is being recorded. I would now like to turn the conference over to your speaker today, Luis Rojo, Vice President, Chief Financial Officer. Please go ahead.

Good morning, and thank you for joining Stepan Company's fourth quarter and full year 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 risk and uncertainties that could cause actual results to differ materially, including but not limited to profits for our foreign operations, global and regional economic conditions, and factors detailing our security and exchange commission filing. 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 information and 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 all for joining us today to discuss our fourth quarter and full year results. To begin, I will share our fourth quarter and full year highlights and strategy outlook, while Luis will provide additional details on our financial results. Despite significant external supply chain challenges and a difficult macro environment, the business was able to deliver another record year. Significant inflation in raw materials, logistics, and other expenses were fully offset with pricing actions, mixed improvements, and productivity efforts. Improved product and customer mix increased revenue by 30% in 2022 after delivering 22% growth in 2021. Surfactant's operating income was down slightly, primarily due to lower global commodity laundry demand, raw material constraints, and customer inventory to stocking. Higher demand for products sold into the functional product and institutional cleaning end markets partially offset the above. Polymer operating income increased 13% versus prior year, despite lower global sales volume due to customer and channel inventory destocking, reduced construction industry activity, and general economic concerns. Specialty products delivered record operating income of $30 million compared to $14 million in the prior year, driven by improved margin and customer mix. Our board of directors declared a quarterly cash dividend on Stefan's common stock of 36.5 cents per share, payable on March 15, 2023. Stefan has paid and increased its dividend for 55 consecutive years. During the fourth quarter of 2022, the company paid $8.1 million in dividends to shareholders and repurchased $2.7 million of the company's stock. For the full year, the company paid $30.6 million in dividends and repurchased $25 million of company stock. The company has $125 million remaining under the share repurchase program authorized by its board of directors. 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. Luis will now share some details about our fourth quarter and full year results.