SCL US Equity☆

Item 1A. Risk Factors

The following discussion identifies the most significant factors that may materially and adversely affect the Company’s business, financial position, results of operations and cash flows. These and other factors, many of which are beyond the Company’s control, may cause future results of operations to differ materially from past results or those results currently expected or desired. The following information should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations (included in Item 7 of this Form 10-K) and the Company’s consolidated financial statements and related notes (included in Item 8 of this Form 10-K).

Business and Operations Risks

Chemical manufacturing is inherently hazardous and may result in accidents or may require planned or unplanned production slowdowns or shutdowns, which may disrupt our operations or expose us to significant losses or liabilities that may have a material impact on our business, financial position, results of operations and cash flows.

Manufacturing facilities in the Company’s industry are subject to planned and unplanned production slowdowns and shutdowns, turnarounds and outages. Unplanned production disruptions may occur for external reasons, such as natural disasters, weather, disease, pandemics, strikes, transportation interruption, government regulation, political unrest or terrorism, or internal reasons, such as fire, explosions, mechanical failure, labor-related work stoppages or slowdowns, maintenance, discharges, contamination, environmental remediation or other manufacturing problems. For example, in 2024, the operations of the Company’s Elwood, Illinois (Millsdale) facility were negatively affected by a flood event. Certain of our production facilities are, and production facilities acquired or built in the future may be, located in areas where unplanned disruptions are more likely. Alternative facilities with sufficient capacity may not be available, may cost substantially more or may take a significant amount of time to increase production or qualify with Company customers, each of which could negatively impact the Company’s business, financial position, results of operations and cash flows. Further, some of the Company’s products cannot currently be made, or made in the volume required, at more than one of the Company’s locations. For some of these products, the Company has access to external market suppliers, but the Company cannot guarantee that these products will be available to it in amounts sufficient to meet its requirements or at a cost that is competitive with the Company’s cost of manufacturing these products. Long-term production disruptions may cause Company customers to seek alternative supply, which could further adversely affect Company profitability.

The hazards associated with chemical manufacturing and the related storage and transportation of raw materials, products and wastes are inherent in our operations. We cannot eliminate the risk of accidental contamination, discharge or injury resulting from those materials. Also, our suppliers and customers may use and/or generate hazardous materials, and we may be required to indemnify our suppliers, customers or waste disposal contractors against damages and other liabilities arising out of the production, handling or storage of our products or raw materials or the disposal of related wastes. Potential risks include explosions and fires, chemical spills and other discharges or releases of toxic or hazardous substances or gases, and pipeline and storage tank leaks and ruptures. Those hazards may result in personal injury and loss of life, damage to property, damages to public health and contamination of the environment, which may result in a suspension of operations and the imposition of civil or criminal fines, penalties and other sanctions, cleanup costs, and claims by governmental entities or third parties. Furthermore, the Company is subject to present claims, and may be subject to future claims, with respect to workplace exposure, contractor exposure to toxic or hazardous substances on the Company’s premises as well as other persons located nearby, workers’ compensation and other matters.

We are dependent on the continued operation of our production facilities and the loss or shutdown of operations over an extended period could have a material adverse effect on our business, financial position, results of operations and cash flows. The Company maintains property, business interruption, products liability and casualty insurance policies, as well as insurance policies covering other types of risks, including pollution legal liability insurance. However, some of these potential manufacturing hazards and risks may not be insurable. Moreover, even when such hazards and risks are insurable, the insurance coverage may not be sufficient to cover all losses resulting from the occurrence of any of these events. Each of these insurance policies is subject to customary exclusions, deductibles and coverage limits, in accordance with industry standards and practices. As a result of market conditions, premiums and deductibles for certain insurance policies can increase substantially and, in some instances, certain insurance may become unavailable or available only with reduced amounts of coverage. There is also a risk, beyond the reasonable control of the Company, that an insurance carrier may not have the financial resources to cover an insurable loss. As a result, the occurrence of any of these events could have a material adverse effect on the Company’s business, financial position, results of operations and cash flows.

The volatility of raw material, natural gas and electricity costs, as well as any disruption in their supply, may result in increased costs and materially and adversely affect the Company’s business, financial position, results of operations and cash flows.

The costs of raw materials, natural gas and electricity represent a substantial portion of the Company’s operating costs. The principal raw materials used in the Company’s products are petroleum-based or plant-based. Natural gas is used in the Company’s manufacturing sites primarily to generate steam for its manufacturing processes. The prices of many of these raw materials have been

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and can be subject to periods of rapid and significant instability, particularly during periods of heightened inflation. These fluctuations in prices may be affected by supply and demand factors, such as general economic conditions, regulatory developments with respect to and restrictions on the transport of raw materials (some of which may be viewed as hazardous), currency exchange rates, changes in tariffs, political instability or terrorist attacks, all of which are beyond the Company’s control. The Company may not be able to pass increased raw material or energy costs on to customers through increases in product prices as a result of arrangements the Company has with certain customers and competitive pressures in the market. In addition, the Company’s suppliers are subject to planned and unplanned production slowdowns and shutdowns, turnarounds and outages. Unplanned production disruptions may occur for external reasons, such as natural disasters, weather, disease, strikes, transportation interruption, government regulation, political unrest or terrorism, or internal reasons, such as fire, explosions, mechanical failure, labor-related work stoppages or slowdowns, maintenance, discharges, contamination, environmental remediation or other manufacturing problems. Certain of our suppliers’ facilities are located in areas where unplanned disruptions are more likely. In the event of supply disruptions, raw materials may not be available to the Company in amounts sufficient to meet our requirements, and alternative raw materials may not be available, may cost substantially more or may take a significant amount of time for the Company to qualify. If the Company is unable to minimize the effects of increased raw material and energy costs or pass such increased costs on to customers, or manage any interruption to the supply of raw materials or energy, its business, financial position, results of operations and cash flows may be materially and adversely affected.

The Company relies heavily on third-party transportation to deliver raw materials to Company manufacturing facilities and ship products to Company customers. Disruptions in transportation or significant changes in transportation costs have affected and could continue to affect the Company’s business, financial position, results of operations and cash flows.

The Company relies heavily on railroads, ships, and other over-the-road shipping methods to transport raw materials to its manufacturing facilities and to ship finished products to customers. Transport operations are exposed to various risks, such as extreme weather conditions, natural disasters, technological problems, work stoppages, personnel shortages and operating hazards, as well as interstate and international transportation regulations. If the Company, its suppliers or third-party transportation operators experience transportation problems, or if there are significant changes in the cost of these services, the Company may not be able to arrange efficient alternatives and timely means to obtain raw materials or ship finished products, which could result in a material adverse effect on Company revenues, costs and operating results. For example, recent conflicts in the Middle East region have contributed to increased shipping costs and transportation times for certain raw materials and products.

Conflicts, military actions, terrorist attacks and general instability, particularly in certain energy-producing nations, along with increased security regulations related to our industry, could adversely affect the Company’s business.

Conflicts, military actions and terrorist attacks have precipitated economic instability, turmoil in financial markets and disruptions in the price and supply of raw materials and energy. The uncertainty and economic or operational disruptions resulting from hostilities, military action or acts of terrorism may impact the Company’s facilities and operations or those of its suppliers or customers. Accordingly, any conflict, military action or terrorist attack that impacts the Company or any of its suppliers or customers, or any resulting economic or operational instability resulting from such conflict, military action or terrorist attack, could have a material adverse effect on the Company’s business, results of operations, financial position and cash flows. For example, Russia’s invasion of Ukraine in February 2022 resulted in higher energy prices and concerns regarding the supply of natural gas to countries in Europe. Higher energy costs and reduced availability of natural gas in European countries could materially and adversely affect the operations and results of operations of the Company or its suppliers and customers.

Cost overruns, delays and miscalculations in capacity needs with respect to the Company’s expansion or other capital projects could adversely affect the Company’s business, financial position, results of operations and cash flows.

From time to time, the Company initiates expansion and other significant capital projects. Projects of this type are subject to risks of delay or cost overruns inherent in any large construction project resulting from numerous factors, including the following: shortages of equipment, materials or skilled labor; work stoppages; unscheduled delays in the delivery of ordered materials and equipment; unanticipated cost increases; difficulties in obtaining necessary permits or in meeting permit conditions; difficulties in meeting regulatory requirements or obtaining regulatory approvals; availability of suppliers to certify equipment for existing and enhanced regulations; design and engineering problems; and failure or delay of third-party service providers, civil unrest and labor disputes. Significant cost overruns or delays in completing a capital project could have a material adverse effect on the Company’s return on investment, results of operations and cash flows. In addition, if the Company misjudges its future capacity needs, this too could materially and adversely impact its business, financial position, results of operations and cash flows.

We may not realize the anticipated cost savings and/or operating efficiencies associated with strategic initiatives.

Our future success and earnings growth depend in part on our ability to achieve an optimal cost structure and operate efficiently in the highly competitive industry. We review our operations in an effort to pursue initiatives to reduce costs, increase effectiveness,

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and optimize cash flow. These initiatives may focus on opportunities to improve procurement, manufacturing, and logistics within our supply chain as well as general and administrative processes. We may not realize all the anticipated cost savings or other benefits from such initiatives. Other events and circumstances, such as financial or strategic difficulties, delays, or unexpected costs, may also adversely impact our ability to realize all the anticipated cost savings or other benefits, or cause us not to realize such cost savings or other benefits on the expected timetable. If we are unable to realize the anticipated benefits, our ability to fund other initiatives may be adversely affected. Such initiatives may involve risks related to the execution of facility closures and asset decommissioning, as well as environmental compliance. Finally, the complexity of the implementation may require a substantial amount of management and operational resources to achieve the anticipated benefits of the initiatives. These and related demands on our resources may divert the Company’s focus from other business issues, have adverse effects on existing business relationships with suppliers and customers, and impact employee morale. Any failure or delay in implementing these initiatives in accordance with our plans could adversely affect our business, operating efficiency, and financial results.

In February 2026, the Company announced Project Catalyst, a comprehensive operational and efficiency plan with the objective to deliver approximately $100.0 million in pre-tax savings over the next two years. If this initiative does not achieve the expected financial impact in the aggregate or on the expected timeline, or if the benefits, even if achieved, are not adequate to meet our long-term growth and profitability, our financial results and ability to meet our long-term growth expectations could be adversely impacted.

Market, Competition and Strategic Risks

Customer product reformulations or new technologies can reduce the demand for the Company’s existing products, and the Company may not be successful in developing or introducing new products.

The Company’s products are used in a broad range of customer product applications. Changes in customer manufacturing processes, customer product reformulations, development and use of new technologies or changes in regulatory, legislative or industry requirements may lead to reduced consumption of the Company’s products or cause customers to consider some Company products obsolete or less attractive.

For example, increased concerns regarding the safety of 1,4 dioxane in consumer products and its potential impact on human health and the environment may lessen the demand for certain of the Company’s products. 1,4 dioxane is generated as a by-product during the manufacture of certain of the Company’s surfactant products, including alkoxylates and ether sulfates, used by its customers as cleaning agents in household cleaning, personal care and cosmetics products. In their finished form, consumer products that contain ethoxylated surfactants may contain trace amounts of 1,4 dioxane. 1,4 dioxane has been categorized by regulators as a toxic and carcinogenic substance at certain levels. In December 2019, New York adopted a law that, beginning in 2022 and 2023, permitted no more than 2 ppm and 1 ppm, respectively, of 1,4 dioxane in cleaning and personal care products and 10 ppm in cosmetics products. California has published proposed regulations on cleaning and personal care products containing 1,4 dioxane; other U.S. states are also considering regulating 1,4 dioxane levels in consumer products. The U.S. Environmental Protection Agency (USEPA) also continues to examine 1,4 dioxane as part of its environmental and occupational regulatory authority. Under TSCA, USEPA identified 1,4 dioxane as a high priority chemical and issued its final risk evaluation and risk determination, concluding that 1,4 dioxane poses an unreasonable risk of injury to human health. USEPA will now progress to the risk management phase, in which it is expected to implement risk management measures to mitigate any identified risks. The European Union is also expected to propose a regulatory limit for 1,4 dioxane content in surfactants. We expect our customers to continue reformulating their personal care, cosmetics and cleaning products to comply with New York’s regulations. These trends and corresponding changes in consumer preferences could reduce demand for our ethoxylated surfactant products, as our customers look to reduce the levels of ethoxylated surfactants in their finished products to stay below the maximum allowed levels or transition to alternative surfactants with lower levels of 1,4 dioxane. We have modified our manufacturing process to reduce 1,4 dioxane content to allow customers to continue to use ethoxylated surfactants at current use levels, while also offering consumer product formulations that contain low/no dioxane surfactants.

An essential component of the Company’s strategy is a focus on continuing to develop new products to replace the sales of products that mature and decline in use, though the Company may not be successful in achieving its growth expectations from developing new products. Moreover, the Company cannot be certain that the costs it incurs investing in new product and technology development will result in an increase in revenues or profits commensurate with its investment, and the introduction of any new products may be disrupted or delayed by manufacturing or other technical difficulties. The Company’s business, financial position, results of operations and cash flows could be materially and adversely affected if the Company is unable to successfully manage the maturation of existing products and the timely and successful development and introduction of new products.

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To the extent the Company seeks acquisition opportunities, it may not be able to make acquisitions of suitable candidates or integrate acquisitions successfully.

In recent years, the Company’s business strategy has included acquisitions to expand into new markets and to enhance its position in its existing markets. To the extent it seeks to do so in the future it may not be able to successfully identify suitable candidates, negotiate appropriate acquisition terms, obtain financing needed to consummate those acquisitions, complete proposed acquisitions or successfully integrate acquired businesses into its existing operations. In addition, any acquisition, once successfully integrated, may not perform as planned, be accretive to earnings, or otherwise prove beneficial to the Company.

Acquisitions involve numerous risks, including the assumption of undisclosed or unindemnified liabilities, difficulties in the assimilation of the operations and the transfer of all necessary licenses and permits, technologies, services and products of the acquired companies and the diversion of management’s attention from other business concerns. In addition, prior acquisitions have resulted, and future acquisitions could result, in the incurrence of substantial additional indebtedness and other expenses.

The Company faces significant global competition in each of its operating segments. If the Company cannot successfully compete in the marketplace, its business, financial position, results of operations and cash flows may be materially and adversely affected.

The Company faces significant competition from numerous global companies as well as national, regional and local companies in the markets it serves. Many of the Company’s competitors have access to greater financial resources, which may enable them to invest significant capital into their businesses, including expenditures for research and development. Some of the Company’s competitors have their own raw material resources and may be able to produce products more economically. In addition, some of the Company’s customers have internal manufacturing capabilities that allow them to achieve make-versus-buy economics, which have resulted and may result, at times in the Company losing business with these customers in volumes that could adversely affect the Company’s profitability.

To maximize profitability levels, the Company must, among other things, maintain the service levels, product quality and performance and competitive pricing necessary to retain existing customers and attract new customers as well as continue to develop and introduce new products. The Company’s inability to do so could place it at a competitive disadvantage relative to its competitors, and if the Company cannot successfully compete in the marketplace, its business, financial position, results of operations and cash flows may be materially and adversely affected.

We are affected by general economic conditions and downturns in certain industries, in some cases driven by consumer preferences, and general economic downturns may have an adverse effect on the Company’s business, financial position, results of operations and cash flows.

General economic conditions and macroeconomic trends may adversely affect users of some end products that are manufactured using the Company’s products and the industries in which such end products are used. During economic downturns or other periods of uncertainty, these users may reduce their volume of purchases of such end products or may purchase alternative products, which would reduce demand for the Company’s products. Increasing concern among consumers, public health professionals and government agencies about environmental, health or wellness issues could lead some of the Company’s customers to limit the use of certain of our products or result in harm to the Company’s reputation. Reduced demand from the primary end markets for the Company’s products, such as the consumer products industry, could adversely affect the Company and demand for our products. Additionally, uncertain conditions in the financial markets pose a risk to the overall economy that may impact consumer demand for such end products and customer demand of some of the Company’s products, as well as the Company’s ability to manage normal commercial relationships with its customers, suppliers and creditors. Some of the Company’s customers may not be able to meet the terms of sale, which would result in increased credit risk and suppliers may not be able to fully perform their contractual obligations due to tighter credit markets or a general slowdown in economic activity.

In the event that economic conditions worsen or result in a prolonged downturn or recession, or consumer-driven preferences result in reduced demand for our products, the Company’s business, financial position, results of operations and cash flows may be materially and adversely affected.

If the Company is unable to protect its intellectual property rights, the Company’s ability to compete may be negatively impacted.

The Company’s patents and other intellectual property may not prevent competitors from independently developing or selling similar or duplicative products and services, and there can be no assurance that the resources the Company invests to protect its intellectual property will be sufficient or that the Company’s intellectual property portfolio will adequately deter misappropriation or improper use of its technology. The Company could also face competition in some countries where it has not invested in an intellectual property portfolio, or where intellectual property rights are more difficult to obtain and/or assert. In addition, the Company may be the target of aggressive and opportunistic enforcement of patents by third parties, including non-practicing entities. Regardless of the merit

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of such claims, responding to infringement claims can be expensive and time-consuming. If the Company is found to infringe any third-party rights, it could be required to pay substantial damages or it could be enjoined from offering some of its products and services. Also, there can be no assurances that the Company will be able to obtain or renew from third parties the licenses it may need in the future on reasonable terms or at all. If the Company is unable to protect or maintain its intellectual property rights, the Company’s business, financial position, results of operations and cash flows may be materially and adversely affected.

Regulatory and Legal Risks

The Company is subject to a variety of environmental, health and safety and product registration laws dealing with the production and sale of chemicals that could require us to incur additional costs or to reformulate or discontinue certain of our products, or expose us to liability or enforcement actions.

The Company’s operations are regulated under a number of federal, state, local and foreign environmental, health and safety laws and regulations that govern, among other things, the production and marketing of chemical substances and the discharge, use, handling, transport, storage and disposal of hazardous materials into the air, soil and water. In the United States, these laws and regulations include, but are not limited to, the U.S. Toxic Substances Control Act (TSCA), the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA), the Clean Air Act, the Clean Water Act, the Resource Conservation and Recovery Act (RCRA), the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), the Occupational Safety and Health Act and state and local laws, such as California’s Safe Drinking Water and Toxic Enforcement Act of 1986 (Proposition 65). For example, in March 2025, the Company received a pre-filing notice from USEPA with penalties assigned for violations of the FIFRA associated with certain of the Company’s biocide products sold by a licensed distributor. Analogous laws outside the United States apply to us in many jurisdictions, including, among others, the Registration, Evaluation, Authorization and Restriction of Chemical Substances (REACH) regulations in the European Union and the United Kingdom and Biocidal Products Regulations in the European Union and the United Kingdom. Compliance with these environmental, health and safety laws and regulations is a major consideration for the Company, and to comply with some of these laws, we may need to alter our product lines or implement different or more costly manufacturing processes (including the installation of pollution control equipment), which could lead to a material adverse effect on our results of operations. In addition, the transportation of certain raw materials is highly regulated and is subject to increased regulation or restrictions. These regulations may restrict or prohibit transport of these raw materials, resulting in these raw materials not being available to the Company in quantities desired by the Company or at costs attractive to the Company, which may restrict or substantially limit the Company’s manufacturing operations.

The REACH regulations are registration systems that impose obligations on manufacturers and importers of chemicals and other products into the European Union and United Kingdom to compile and file reports and testing data on, and perform safety assessments for, certain chemical substances. Any new substances introduced to the EU or UK markets in the future must be registered. The costs associated with the Company’s compliance with these registrations have been substantial and are expected to increase as product sales increase because higher tonnage bands have higher annual registration fees and require more testing to support the registration. Moreover, if a registration in the future is not submitted by any applicable deadline, our ability to sell those products may be negatively impacted until the registration process has been completed. In addition, the European Chemical Agency is evaluating existing chemical registrations and may require additional testing and data collection. Chemicals may be assessed and removed from EU commerce entirely, potentially requiring the Company to discontinue certain product lines and to reformulate others, which could materially alter the Company’s marketplace position or otherwise have a material financial effect on its revenues and expenses. Regulators in other countries are also implementing chemical registration regulations similar to the REACH regulations.

Furthermore, some of the laws and regulations applicable to us have changed in recent years to impose new obligations or increasing compliance costs that could also force us to reformulate or discontinue certain of our products. For example, the European Union is now requiring a review of existing active biocide substances, and based on this review, the European Commission or an individual member state may decide not to authorize the product for continued sale. As another example, TSCA now mandates that the USEPA must designate “high priority” chemicals and perform a risk evaluation, which could result in a finding of “unreasonable risk” and a decision to promulgate new regulations to address such risk. As a result of such regulations, our ability to sell certain products may be curtailed and customers may avoid purchasing some products in favor of less regulated, less hazardous or less costly alternatives. The Company may offer alternative products, sales of which may or may not replace sales of such curtailed products. It may be impractical for us to continue manufacturing heavily regulated products, and we may incur costs to shut down or transition such operations to alternative products. In this regard, the nature, stringency and timing of any future regulations or changes in regulations are uncertain.

In addition, increasingly stringent regulation of human exposure to ethylene oxide by regulatory authorities in the United States could require material expenditures or changes in our manufacturing operations. The Company uses ethylene oxide at its Winder, Georgia, Elwood, Illinois (Millsdale) and Pasadena, Texas facilities. The Company uses ethylene oxide in a closed loop process to manufacture surfactants that are used in products such as laundry detergents. The Company does not manufacture ethylene oxide, nor does it use ethylene oxide as a fumigant. Ethylene oxide is listed as a hazardous air pollutant under the Clean Air Act, as amended, emissions of which are regulated by the USEPA and other regulatory authorities. In 2020, Georgia adopted a law requiring any spill or

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release of ethylene oxide that occurs outside of normal operations to be reported to the state within 24 hours. In 2024, the USEPA issued a rule requiring that covered facilities conduct fenceline monitoring for ethylene oxide and install certain control and monitoring devices. Georgia and Illinois legislators have proposed legislation that would impose additional restrictions on the use of ethylene oxide. The USEPA is considering new standards for ethylene oxide emissions. While our production facilities have not yet been materially affected by changes in ethylene oxide regulation, any additional regulatory restrictions on the use or emission of ethylene oxide by facilities could impair our ability to manufacturer certain products in affected locations, including at our Winder, Georgia, Elwood, Illinois (Millsdale) and Pasadena, Texas facilities.

Compliance with environmental laws could restrict the Company’s ability to expand its facilities or require the Company to modify its facilities and processes or acquire additional costly pollution control equipment, incur other significant expenses, or expose the Company to greater liability associated with its production processes and products. The Company has incurred and will continue to incur capital expenditures and operating costs in complying with these laws and regulations, as our operations currently use, and have historically used, hazardous materials and generate, and have historically generated, quantities of hazardous waste. Some existing environmental laws and regulations impose liability and responsibility on present and former owners, operators or users of facilities and sites for contamination at those locations without regard to causation or knowledge of contamination. Certain of our sites have an extended history of industrial use, which may expose us to liability. We are subject to regulatory oversight and investigation, remediation, and monitoring obligations at certain current and former U.S. Superfund sites, as well as third-party disposal sites, under federal laws and their state and local analogues, including the RCRA, the Clean Water Act, the Clean Air Act, and CERCLA, as well as analogous foreign laws. 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 current significant environmental proceedings related to certain sites. In the event that new contamination is discovered, including at facilities we may acquire in the future, the Company may become subject to additional obligations. The costs and liabilities associated with these issues may have a material adverse effect on the Company’s business, financial position, results of operations and cash flows.

The Company is also subject to numerous federal, state, local and foreign laws that regulate the manufacture, storage, distribution and labeling of many of the Company’s products, including some of the Company’s disinfecting, sanitizing and antimicrobial products. Some of these laws require the Company to have operating permits for the Company’s production facilities, warehouse facilities and operations. Various federal, state, local and foreign laws and regulations also require the Company to register the Company’s products and to comply with specified requirements with respect to those products, such as FIFRA, the EU Biocidal Products Regulation and Mexico’s General Law of Ecological Equilibrium and Environmental Protection. Additionally, those requirements, and enforcement of those requirements, may become more stringent in the future. The ultimate cost of compliance with any such requirements could be material.

Although it is our policy to comply with such laws and regulations, it is possible that we have not been or may not be at all times in material compliance with all of those requirements. If the Company has failed to comply or fails to comply in the future with any of these laws and regulations, including permitting and licensing requirements, it may be liable for damages and the costs of remedial actions in excess of the Company’s recorded liabilities, and may also be subject to fines, injunctions or criminal sanctions or to revocation, non-renewal or modification of the Company’s operating permits and revocation of the Company’s product registrations. Any such revocation, modification or non-renewal may require the Company to cease or limit the manufacture and sale of its products at one or more of the Company’s facilities, which may limit or prevent the Company’s ability to meet product demand or build new facilities and may have a material adverse effect on the Company’s business, financial position, results of operations and cash flows. Any such revocation, non-renewal or modification may also result in an event of default under the indenture for the Company’s notes or under the Company’s credit facilities, which, if not cured or waived, may result in the acceleration of all or a portion of the Company’s indebtedness.

In addition to the costs of complying with environmental, health and safety laws and regulations, the Company has incurred, and may incur in the future, costs defending against environmental litigation and/or investigations brought by government agencies and private parties, including administrative proceedings. The Company is, and may be in the future, a defendant in lawsuits brought by parties alleging environmental damage, personal injury or property damage. A significant judgment or settlement against the Company, to the extent not covered by existing insurance policies, could have a material adverse effect on its business, financial position, results of operations and cash flows. Although the Company has insurance policies that may cover some of these potential losses, there is always uncertainty as to whether such insurance may be sufficient to cover such losses or available at all to the Company based on case-specific factors and the specific provisions of the Company’s insurance policies.

The potential cost to the Company relating to environmental, health and safety and product registration matters is uncertain due to factors such as the complexity, evolving and sometimes conflicting nature of laws and regulations relating to the environment, health and safety and product registration, including those outside of the United States. Environmental, health and safety and product registration laws and regulations may also become more stringent over time, imposing greater compliance costs and increasing risks and penalties associated with any violation, as well as restricting or prohibiting the sale of existing or new products, which may also negatively impact the Company’s operating results. Without limiting the foregoing, these laws or regulations may also restrict or prohibit the use of non-renewable or carbon-based substances, or impose fees or penalties for the use of these substances. Accordingly, the

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Company may become subject to additional liabilities and increased operating costs in the future under these laws and regulations. The impact of any such changes, which are unknown at this time, may have a material adverse effect on the Company’s business, financial position, results of operations and cash flows.

Various liability claims could materially and adversely affect the Company’s business, financial position, results of operations and cash flows.

The Company may be required to pay for losses or injuries purportedly caused by its products. The Company faces an inherent exposure to various types of claims including general liability, product liability, product recall, toxic tort and environmental, among others, if its products, or the end products that are manufactured with the Company’s products, result in property damage, injury or death. In addition, because the Company conducts business in multiple jurisdictions, the Company also faces an inherent exposure to other general claims based on its operations in those jurisdictions and the laws of those jurisdictions, including but not limited to claims arising from its relationship with employees, distributors, agents, customers and other parties with whom it has a business relationship, directly or indirectly. Many of these claims may be made against the Company even if there is no evidence of a loss from that claim, and these claims may be made by individual persons, groups of persons, or groups of plaintiffs in a class action. Defending these claims could result in significant legal expenses relating to defense costs and/or damage awards and diversion of management’s time and the Company’s resources. Any claim brought against the Company could materially and adversely affect the Company’s business, financial position, results of operations and cash flows.

The Company’s failure to comply with the anti-corruption laws of the United States and various international jurisdictions could negatively impact its reputation and results of operations.

Doing business on a worldwide basis requires the Company to comply with anti-corruption laws and regulations imposed by governments around the world with jurisdiction over our operations, which may include the U.S. Foreign Corrupt Practices Act (FCPA) and the U.K. Bribery Act 2010 (the Bribery Act), as well as the laws of the other countries where the Company does business. These laws and regulations can apply to companies and individual directors, officers, employees and agents, and may restrict the Company’s operations, trade practices, investment decisions and partnering activities. Where they apply, the FCPA, the Bribery Act and similar laws prohibit, among other things, the Company and its officers, directors, employees and business partners, including joint venture partners and agents acting on the Company’s behalf, from corruptly offering, promising, authorizing or providing anything of value to “foreign officials” for the purposes of influencing official decisions or obtaining or retaining business or otherwise obtaining favorable treatment. The Bribery Act also prohibits non-governmental “commercial” bribery and accepting bribes. Part of the Company’s business may involve dealings with governments and state-owned business enterprises, the employees and representatives of which may be considered “foreign officials” for purposes of the FCPA and the Bribery Act. The Company is also subject to the jurisdiction of various governments and regulatory agencies around the world, which may bring Company personnel and agents into contact with “foreign officials” responsible for issuing or renewing permits, licenses, or approvals or for enforcing other governmental regulations. The Company’s global operations, including in countries with high levels of perceived corruption, expose it to the risk of violating, or being accused of violating, anti-corruption laws. Any failure on the part of the Company to successfully comply with these laws and regulations may expose the Company to reputational harm as well as significant sanctions, including criminal fines, imprisonment of its employees or representatives, civil penalties, disgorgement of profits, injunctions and debarment from government contracts, as well as other remedial measures. Investigations of alleged violations can be expensive and disruptive. Compliance with these laws can increase the cost of doing business globally. The Company maintains policies and procedures designed to assist the Company and its subsidiaries in complying with applicable anti-corruption laws. However, there can be no guarantee that these policies and procedures will effectively prevent violations by Company employees or representatives for which the Company may be held responsible, and any such violation could materially and adversely affect the Company’s reputation, as well as its business, financial position and results of operations and cash flows.

International Operations Risks

The Company’s results of operations may be adversely affected by international business risks, including changes in global trade policy, fluctuations in currency exchange rates, legal restrictions and taxes.

The Company has substantial operations outside the United States. In the year ended December 31, 2025, the Company’s sales outside of the United States constituted approximately 44 percent of the Company’s net sales. In addition to the risks described in this Annual Report on Form 10‐K that are common to both the Company’s U.S. and non-U.S. operations, the Company faces, and will continue to face, risks related to the Company’s foreign operations, including:

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trade and currency restrictions, including tariffs, related retaliatory countermeasures and currency exchange controls implemented by the United States and foreign countries;

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fluctuations in foreign currency exchange rates, which may affect product demand and may adversely affect the profitability in U.S. dollars of products and services the Company provides in international markets where payment for the Company’s products and services is made in the local currency;

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political, economic, financial and market conditions, which may be unstable;

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variability of intellectual property laws outside the United States, which may impact enforceability and consistency of protection of intellectual property assets;

•

high levels of inflation;

•

changes in labor conditions and difficulties in staffing and managing international operations;

•

corruption by government officials or other third parties or other adverse government actions;

•

differing economic cycles and adverse economic conditions;

•

changes in foreign laws and tax rates or U.S. laws and tax rates with respect to foreign income, which may unexpectedly increase the rate at which the Company’s income is taxed, impose new and additional taxes on remittances, repatriation or other payments by the Company’s subsidiaries, or cause the loss of previously recorded tax benefits;

•

greater difficulty enforcing contracts and collecting accounts receivable;

•

enforceability and compliance with U.S. and foreign laws affecting operations outside of the United States, including the FCPA (and foreign equivalents), export controls and regulations administered by the Office of Foreign Assets Control; and

•

evolving laws and regulations over chemicals and chemical production and transportation that could limit the Company’s ability to sell products in certain markets (for example, the EU REACH regulation) and changing laws related to or the modification or non-renewal of operating permits and licenses that could result in material costs relating to regulatory compliance, liabilities, litigation proceedings, or other impacts, such as restrictions or prohibitions on our products.

The impacts of any or all of the foregoing could have a material adverse effect on the Company’s business, financial position, results of operations and cash flows.

The international scope of the Company’s operations and corporate structure may expose the Company to potentially adverse tax consequences.

The Company is subject to taxation in and to the tax laws and regulations of multiple jurisdictions as a result of the international scope of its operations and corporate structure. The Company is also subject to intercompany pricing laws, including those relating to the flow of funds between its entities pursuant to, for example, purchase agreements, licensing agreements or other arrangements. Adverse developments in these laws or regulations, or any change in position regarding the application, administration or interpretation of these laws or regulations in any applicable jurisdiction could have a material adverse effect on the Company’s business, financial position, results of operations and cash flows. In addition, the tax authorities in any applicable jurisdiction may disagree with the positions the Company has taken or intends to take regarding the tax treatment or characterization of any of the Company’s transactions, including the tax treatment or characterization of the Company’s indebtedness. The Company may also make certain tax elections, such as bonus depreciation, that could prevent the Company from fully benefiting from tax deductions such as the global intangible low-taxed income deduction or utilizing tax credits such as foreign tax credits. If any applicable tax authorities were to successfully challenge the tax treatment or characterization of any of the Company’s transactions, or the Company makes tax elections that impact other tax benefits, the potential resulting disallowance of deductions, imposition of withholding taxes on internal deemed transfers or other consequences could have a material adverse effect on the Company’s business, financial position, results of operations and cash flows.

Fluctuations in foreign currency exchange rates could affect Company financial results.

The Company is also exposed to fluctuations in foreign exchange rates. The Company’s results of operations are reported in U.S. dollars. However, outside the United Sates, the Company’s sales and costs are denominated in a variety of currencies including the European euro, British pound, Canadian dollar, Mexican peso, Colombian peso, Philippine peso, Brazilian real, Polish zloty, and Chinese RMB. The Company translates its local currency financial results into U.S. dollars based on average exchange rates prevailing during the reporting period or the exchange rate at the end of that period. During times of a strengthening U.S. dollar, the Company’s reported international sales and earnings may be reduced because the local currency may translate into fewer U.S. dollars. Fluctuations in exchange rates may materially and adversely affect the Company’s business, financial position, results of operations and cash flows.

In all jurisdictions in which the Company operates, the Company is also subject to laws and regulations that govern foreign investment, foreign trade and currency exchange transactions. These laws and regulations may limit the Company’s ability to repatriate

14

cash as dividends or otherwise to the United States or to efficiently allocate cash to support strategic initiatives, and may limit the Company’s ability to convert foreign currency cash flows into U.S. dollars. A weakening of the currencies in which the Company generates sales relative to the foreign currencies in which the Company’s costs are denominated may lower the Company’s operating profits and cash flows.

Financial Risks

The Company could be adversely affected by downgrades to its credit ratings or disruptions in its ability to access well-functioning credit markets.

Historically, the Company has relied on the debt capital markets and bank credit facilities to fund portions of its capital investments and other corporate initiatives as part of its overall financing strategy, including working capital management strategy. The Company’s continued access to credit markets, and the terms of such access, depend on multiple factors including prevailing conditions in those markets, as well as the Company’s operating performance, and its credit ratings. These credit ratings can change over time and are based on a number of factors, which include rating agencies’ assessment of the Company’s financial strength and outlook. There can be no assurance that any particular rating assigned to the Company or its debt will remain in effect for any given period of time or that a rating will not be changed or withdrawn by a rating agency, if in that rating agency’s judgment, circumstances relating to the basis of the rating so warrant. In addition, incurrence of additional debt by the Company could adversely affect its credit ratings. Downgrades of the Company’s credit ratings or adverse changes in the market’s perception of the Company’s creditworthiness could materially and adversely affect the Company’s cost of funds, liquidity, competitive position or access to credit markets. These changes also could increase the cost of or counterparty risks associated with existing facilities, which could materially and adversely affect the Company’s business, financial position, results of operations and cash flows. In this regard, the Company depends on banks and other financial institutions to provide credit and perform under the Company’s agreements with them. Defaults by one or more of these counterparties on their obligations to the Company could materially and adversely affect the Company’s liquidity and financial position.

The Company has a significant amount of indebtedness and may incur additional indebtedness, or need to refinance existing indebtedness, in the future, which may adversely affect the Company’s business, financial position, results of operations and cash flows.

The Company has a significant amount of indebtedness and may incur additional indebtedness in the future. As of December 31, 2025, the Company had $324.0 million of debt on its balance sheet consisting of senior unsecured notes with maturities ranging from 2026 through 2033. In addition, the Company is party to a credit agreement providing for a $350.0 million revolving credit facility and a $100.0 million delayed-draw term loan credit facility; as of December 31, 2025, the Company had $302.7 million outstanding borrowings and $4.1 million outstanding letters of credit under the credit agreement with $126.9 million remaining available for future borrowings.

Certain of the Company’s foreign subsidiaries periodically maintain bank term loans and short-term bank lines of credit in their respective countries to meet working capital requirements as well as to fund capital expenditure programs and acquisitions. As of December 31, 2025, the Company’s foreign subsidiaries had no outstanding debt.

The Company’s current indebtedness and any additional indebtedness incurred in the future may materially and adversely affect its business, financial position, results of operations and cash flows. For example, such indebtedness could:

•

require the Company to dedicate a substantial portion of cash flow from operations to pay principal and interest on the Company’s debt, which would reduce funds available to fund future working capital, capital expenditures and other general operating requirements;

•

limit the Company’s ability to borrow funds that may be needed to operate and expand its business;

•

limit the Company’s flexibility in planning for or reacting to changes in the Company’s business and the industries in which the Company operates;

•

increase the Company’s vulnerability to general adverse economic and industry conditions or a downturn in the Company’s business; and

•

place the Company at a competitive disadvantage compared to its competitors that have less debt.

The Company’s debt agreements contain customary covenants and other provisions that, among other things, require maintenance of certain financial ratios and place limitations on additional debt, investments and payment of dividends. The Company’s ability to comply with these provisions may be affected by events beyond our control. Failure to comply with these provisions could require

15

repayment of outstanding debt or lead to a debt restructuring that could materially and adversely affect the Company’s business, financial position, results of operations and cash flows.

In addition, an increase in interest rates could limit the Company’s ability to incur additional debt to fund the Company’s strategic plans or to refinance maturing debt without incurring significant additional costs and could make borrowings under the Company’s revolving credit facility or other floating rate debt materially more expensive. Further, any future disruptions in the credit and financial markets may reduce the availability of debt financing or refinancing alternatives and increase the costs associated with such financing activities. If the Company is unable to secure financing when needed on satisfactory terms, or at all, its business, financial position, results of operations and cash flows may be materially and adversely affected.

General Risks

Interruption of, damage to or compromise of the Company’s information technology (IT) systems, failure to maintain the integrity of customer, colleague or Company data or illegal or fraudulent activities committed against the Company could harm the Company’s reputation and have an adverse effect on the Company’s business, financial position, results of operations and cash flows.

The Company relies on IT systems in its operations, including production, supply chain, research and development, finance, human resource and regulatory functions. The Company’s ability to effectively manage its business depends on the security, reliability and adequacy of these systems. IT system failures due to events including but not limited to network disruptions, programming errors, computer viruses and security breaches (e.g., cyber-attacks) could impact production activities, impede shipment of products, cause delays or cancellations of customer orders, or hamper the processing of transactions or reporting of financial results. These or similar occurrences, whether accidental or intentional, could result in theft, unauthorized use or publication of our intellectual property or confidential business information of our employees, customers, suppliers or other third parties, which could harm our reputation and competitive position, reduce the value of our investments in research and development and other strategic initiatives, result in a loss of business, as well as remedial and other costs, fines, investigations, enforcement actions or lawsuits or otherwise materially and adversely affect our business, financial position, results of operations and cash flows.

During the normal course of business, we have experienced and expect to continue to experience attempts to compromise our information and communications technology and related systems. Despite the security measures the Company has in place, the Company’s customers’ and suppliers’ information and operational technology systems could be vulnerable to cyber-threats such as computer viruses or other malicious codes, security breaches, unauthorized access, phishing attacks and other disruptions from system failures, including network outages, unintentional or malicious actions of employees or contractors or cyber-attacks by hackers, criminal groups, nation-states and nation-state-sponsored organizations. We anticipate that the risk of cybersecurity attacks will increase as artificial intelligence is increasingly used to identify vulnerabilities and conduct increasingly sophisticated attacks. In addition, if a material, actual or perceived breach of our security occurs, the public perception of the effectiveness of our security measures could be harmed and we could lose customers or suppliers. Any such material disruptions or breaches of security could have a material adverse effect on our business, financial position, results of operations and cash flows.

The defensive measures and training that the Company takes to limit and manage threats, especially cyber-related and social engineering threats, to our business may not adequately anticipate, prevent or mitigate harm we may suffer from such threats. Criminals use evolving and increasingly sophisticated methods of perpetrating illegal and fraudulent activities. For example, as previously disclosed, the Company determined in July 2024 that one of its subsidiaries in Asia was the victim of criminal social engineering scheme that resulted in a series of fraudulently-induced outbound payments for which the Company recognized pre-tax charges of $6.8 million in 2024. See Note 24, Other Matter, of the notes to the Company’s consolidated financial statements (included in Item 8 of this Form 10-K) for additional details regarding the criminal social engineering scheme. Fraudulent activities committed against the Company could have a material adverse effect on its business, financial position, results of operations and cash flows.

The Company continues to develop and enhance controls and security measures designed to protect against the risk of theft, loss or fraudulent or unlawful use of customer, supplier, third party, employee or Company data, or illegal or fraudulent activities committed against the Company and it maintains an ongoing process to re-evaluate the adequacy of its controls and measures. The Company may also be required to expend additional resources to continue to enhance its information privacy and security measures and/or to investigate and remediate any information security vulnerabilities. The Company maintains what it believes to be adequate and collectible insurance in the event of the theft, loss, fraudulent or unlawful use of customer, supplier, third party, employee or Company data, but any such occurrences could result in costs that may not be covered or may be in excess of any available insurance that the Company may have procured. While the Company has a comprehensive program in place for continuously reviewing, maintaining, testing and upgrading its IT systems and security, there can be no assurance that such efforts will prevent breakdowns of or breaches in Company IT systems

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or illegal or fraudulent activities committed against the Company that could materially and adversely affect the Company’s business, financial position, results of operations and cash flows.

The Company’s success depends on its executive management and other key personnel.

The Company’s future success depends to a significant degree on the skills, experience and efforts of its executive management and other key personnel and their ability to provide the Company with uninterrupted leadership and direction. The availability of highly qualified talent is limited and the competition for talent is robust; as a result, the Company may not be able to recruit and retain the personnel it needs if it were to lose an existing member of executive management or other key personnel. The Company’s future success will depend on its ability to have adequate succession plans in place and to attract, retain and develop qualified personnel. A failure to efficiently replace members of executive management and other key personnel and to attract, retain and develop new qualified personnel could have a material and adverse effect on the Company’s business financial position, results of operations and cash flows.

Item 1B. Unresolved Staff Comments

None

Item 1C. Cybersecurity

Cybersecurity Risk Management

We assess, identify and manage material risks from cybersecurity threats through various policies, procedures and processes, including through our Enterprise Risk Management program (ERM), our information security policies and standards, workforce cybersecurity trainings and third-party assessments and programs.

The Company uses ERM principles to help identify, prevent, and mitigate potential risks, including cybersecurity and related risks. We base our ERM program on the Committee of Sponsoring Organizations of the Treadway Commission (COSO) framework. Individuals representing Stepan’s global locations and functions contribute to our risk assessments at least annually through surveys and in-person interviews. Members are polled quarterly to spot emerging risks and trends. The Company’s Vice President, Chief Compliance and Risk Officer leads the ERM program and reports regularly to the Audit Committee of the Board of Directors on ERM matters.

The Company maintains cybersecurity programs according to the set of guidelines developed by the National Institute of Standards and Technology through the Cybersecurity Framework. The Company maintains a set of IT Security Standards that provides a framework of layered security protection. In addition, the Company maintains and communicates to its workforce a Use of Information Technology Policy to support the understanding of and commitment to safely using IT assets. This knowledge can help prevent accidental or intentional misuse of Company IT resources, which can compromise the confidentiality, integrity, and availability of sensitive data and systems. The Company requires cybersecurity training to raise awareness and educate employees about cybersecurity risks. The Company updates its training program at least annually.

The Company engages a variety of IT assessors to evaluate and test the Company’s cybersecurity and cybersecurity controls. Additionally, the Company engages IT consultants to provide tabletop exercises, ransomware simulations, cyber policy and standards development, cybersecurity, data security, and IT training events, cybersecurity and data security testing and monitoring, and cybersecurity implementation projects.

Although the Company has put in place the cybersecurity policies, procedures and processes described above, the Company remains exposed to cybersecurity attacks and incidents and misuse or manipulation of any of its IT systems, which could have a material adverse effect on its 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. For risks associated with cybersecurity threats, see the risk factor “Interruption of, damage to or compromise of the Company’s information technology (IT) systems, failure to maintain the integrity of customer, colleague or Company data or illegal or fraudulent activities committed against the Company could harm the Company’s reputation and have an adverse effect on the Company’s business, financial position, results of operations and cash flows.” included in “Part I—Item 1A. 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.The Company’s Chief Information Officer, who reports to the President and Chief Executive Officer, is in charge of assessing and managing our risks related to cybersecurity and oversees a team of full-time cybersecurity specialist employees.Utilizing the processes noted above, this team remains informed about and monitors the prevention, detection, mitigation and remediation of cybersecurity incidents.The Company’s Chief Information Officer has served in a variety of IT and cybersecurity roles for more than twenty-five years, including serving in IT infrastructure, cybersecurity, enterprise application, and project management office leadership roles for both public and privately held companies in the chemical, pharmaceutical, and manufacturing industries. He has earned the IT Infrastructure Library (ITIL) Service Master Certification. 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.

Item 2. Properties

The following are the Company’s principal physical properties. Unless otherwise noted, the listed properties are owned by the Company. Management believes that the Company’s facilities are suitable and adequate for the Company’s current operations.

Name of Facility Location Site Size Segment

1. Millsdale Elwood, Illinois 492 acres Surfactants/Polymers

2. Winder Winder, Georgia 202 acres Surfactants

3. Maywood Maywood, New Jersey 19 acres Surfactants /Specialty Products

4. Pasadena Pasadena, Texas 51 acres Surfactants

5. Stepan France Voreppe, France 20 acres Surfactants

6. Stepan Ecatepec Ecatepec, Mexico 34 acres Surfactants

8. Stepan Brazil Vespasiano, Minas Gerais, Brazil 27 acres Surfactants

9. Global Technology Center Northfield, Illinois 8 acres N/A

10. Company Headquarters Northbrook, Illinois 1.72 acres (leased) N/A

Item 3. Legal Proceedings

There are a variety of legal proceedings pending or threatened against the Company that occur in the normal course of the Company’s business, the majority of which relate to environmental assessment, protection and remediation matters. Some of these proceedings may result in fines, penalties, judgments or costs being assessed against the Company at some future time. The Company’s operations are subject to extensive local, state and federal regulations, including the U.S. Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA) and the Superfund amendments of 1986 (Superfund) as well as comparable regulations applicable to the Company’s foreign locations. Over the years, the Company has received requests for information related to or has been named by 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. 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. The Company’s material legal proceedings are described below:

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. Pursuant to (i) a September 21, 1987 Administrative Order on Consent entered into between the U.S. Environmental Protection Agency (USEPA) and the Company for property formerly owned by the Company at the Maywood site and (ii) the issuance of an order on May 2, 1991, by the USEPA to the Company for property currently owned by the Company at the Maywood site, the Company has completed various Remedial Investigation/Feasibility Studies of soil and groundwater at the Maywood site. On September 24, 2014, the USEPA issued its Record of Decision (ROD) for chemically-contaminated soil at the Maywood site. The ROD was amended pursuant to an Explanation of Significant Differences in January 2021. On February 29, 2024, the U.S. 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. The USEPA has not yet issued a ROD for chemically-contaminated groundwater at the Maywood site.

Based on the most current information available, the Company believes its recorded liability is reasonable having considered the range of estimated costs of remediation for the Maywood site. The estimate of the cost of remediation for the Maywood site could change again as the Company continues to hold discussions with the USEPA, as the design of the remedial action is finalized, if a groundwater ROD is issued or if other potentially responsible parties are identified. 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). The Company was named as a potentially responsible party in an October 2, 1998 lawsuit in the U.S. District Court for the District of New Jersey that involved the D’Imperio site. The Company is cooperating with other potentially responsible parties to implement the selected remedy. Based on current information, the Company believes that its recorded liability is reasonable having considered the range of estimated cost of remediation for the D’Imperio site. Depending on the ultimate cost of the remediation at this site, the amount for which the Company is liable could differ materially from the Company’s current recorded liability.

Wilmington Site

Property formerly owned and operated by the Company in Wilmington, Massachusetts was listed on the National Priorities List in 2006. The Company, together with the current site owner and another potentially responsible party, entered into an Administrative Order on Consent in July 2007 to undertake a Remedial Investigation and Feasibility Study. A ROD was issued by USEPA on March 30, 2021. The Company and three other potentially responsible parties entered into a consent decree, dated September 28, 2023, with USEPA and the Commonwealth of Massachusetts that requires the remedial design and remedial action of the remedy selected in the ROD for two operable units and an interim remedy for another operable unit. Remediation at this site is being managed by its current owner, to whom the Company sold the property in 1980. The Company is contractually obligated to contribute up to five percent of the environmental response costs incurred by the current owner with no limitation on the ultimate amount of contributions. 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. Depending on the ultimate cost of the remediation at this site, the amount for which the Company is liable could differ materially from the current recorded liability. On July 29, 2022, the Company and other potentially responsible parties were notified of a possible joint claim by federal and state trustees for alleged natural resource damages related to the Wilmington site. The 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.

Millsdale Site

On March 26, 2024, the Company received a Notice and Finding of Violation from the USEPA alleging violations of air regulations at the Company’s Elwood, Illinois (Millsdale) facility. The notice alleges violations related to operating parameters and air emission requirements. The notice does not state whether the USEPA intends to pursue financial penalties or operational remedies. The alleged violations may result in a range of possible penalties; however, at this stage of the matter, the Company is unable to predict the ultimate outcome or what impact, if any, the outcome might have on the Company’s financial position, results of operations or cash flows.

Other U.S. Sites

Through the regular environmental monitoring of its plant production sites, the Company discovered levels of chemical contamination that were above thresholds allowed by law at its Elwood, Illinois (Millsdale) and Fieldsboro, New Jersey plants. The Company voluntarily reported its results to the applicable state environmental agencies. As a result, the Company is required to perform self-remediation of the affected areas. Based on current information, the Company believes that its recorded liability for the remediation of the affected areas is appropriate based on an estimate of expected costs. However, actual costs 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

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Brazilian subsidiary filed a lawsuit on March 23, 2017 to recover PIS/COFINS overpayments. The Company’s recovery case was successful and became final in November 2018. In May 2021, the Brazil Supreme Court modulated its original decision so that only taxpayers that had filed lawsuits before March 15, 2017, should recover prior PIS/COFINS overpayments. On June 12, 2023, the Brazil National Treasury filed a rescission action against the Company’s Brazilian subsidiary to rescind its use of the PIS/COFINS tax credits for the period from March 23, 2012, to March 15, 2017. 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). Based 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.

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. During the second half of 2025, the Company recovered $1.0 million of the USEPA penalty from third parties.

Item 4. Mine Safety Disclosures

Not Applicable.

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PART II

Item 5. 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. This number does not include beneficial owners whose shares are held by banks, brokers and other institutions holding shares of the Company’s common stock on behalf of their customers.

(b)

Below is a summary by month of shares purchases by the Company during the fourth quarter of 2025:

(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 shares of Company common stock tendered by employees to settle statutory withholding taxes related to the distribution of restricted stock units.

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(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. The Dow Jones Chemical Industry Index is a market-capitalization weighted grouping of 35 chemical companies, including major manufacturers of both basic and specialty products. The Company is not included in the Dow Jones Chemical Industry Index. The Russell 2000 Index is a market-capitalization weighted grouping of 2,000 small to medium sized companies in a broad range of industries. 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.

Item 6. (Removed and Reserved)

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following is management’s discussion and analysis (MD&A) of certain significant factors that have affected the Company’s financial condition and results of operations during the annual periods included in the accompanying consolidated financial statements.

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. 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).

Overview

The Company produces and sells intermediate chemicals that are used in a wide variety of applications worldwide. 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. Other applications include fabric softeners, germicidal quaternary compounds, disinfectants, lubricating ingredients, emulsifiers for spreading agricultural products and industrial applications such as latex systems, plastics and composites. Surfactants are manufactured at five sites in the United States, two European sites (United Kingdom and France), five Latin American sites (one site in Colombia and two sites in each of Brazil and Mexico) and one Asian site (Singapore).

•

During the fourth quarter of 2025, the Company completed the sale of its Stepan Philippines Quaternaries, Inc. (SPQI) manufacturing assets located in Bauan, Batangas, Philippines to Masurf, Inc, a subsidiary of Musim Mas Holdings Pte. Ltd. As part of the transaction, SPQI entered into a tolling agreement with Masurf, Inc. for the continued service of SPQI customers in Southeast Asia. See Note 20, Sales of Assets, of the notes to the Company’s consolidated financial statements (included in Item 8 of this Form 10-K) for more details.

•

During the fourth quarter of 2025, the Company successfully closed on the sale of its manufacturing assets located in Lake Providence, Louisiana. This transaction followed the Company’s sale of its SPQI manufacturing assets in the Philippines, representing the Company's ongoing footprint optimization efforts and focus on core growth opportunities. See Note 20, Sales of Assets, of the notes to the Company’s consolidated financial statements (included in Item 8 of this Form 10-K) for more details.

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). Powdered polyester resins are used in coating applications. CASE and powdered polyester resins are collectively referred to as specialty polyols. Phthalic anhydride is used in unsaturated polyester resins, alkyd resins and plasticizers for applications in construction materials and components of automotive, boating and other consumer products. In addition, the Company uses phthalic anhydride internally in the production of polyols. In the United States, polyurethane polyols are manufactured at the Company’s Elwood, Illinois (Millsdale) and Wilmington, North Carolina sites. Phthalic anhydride is manufactured at the Company’s Millsdale site and specialty polyols are manufactured at the Company’s Columbus, Georgia, site. In Europe, polyurethane polyols are manufactured at the Company’s plants in Germany and the Netherlands and specialty polyols are manufactured at the Company’s Poland site. In Asia, polyurethane polyols and specialty polyols are manufactured at the Company’s Nanjing, China, plant.

Specialty Products – Specialty products, which accounted for four percent of consolidated net sales in 2025, include flavors, emulsifiers and solubilizers used in food, flavoring, nutritional supplement and pharmaceutical applications. Specialty products are primarily manufactured at the Company’s Maywood, New Jersey site.

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Deferred Compensation Plans

The accounting for the Company’s deferred compensation plans can cause period-to-period fluctuations in Company income and expenses. Compensation expense is recognized when the value of the Company’s common stock and mutual fund investment assets held for the plans increase, and compensation income is recognized when the value of the Company’s common stock and mutual fund investment assets decline. 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 YearEnded December 31,

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 YearEnded December 31,

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.

Below are the year-end Company common stock market prices used in the computation of deferred compensation income and expense:

December 31

Effects of Foreign Currency Translation

The Company’s foreign subsidiaries transact business and report financial results in their respective local currencies. As a result, foreign subsidiary income statements are translated into U.S. dollars at average foreign exchange rates appropriate for the reporting period. Because foreign exchange rates fluctuate against the U.S. dollar over time, foreign currency translation affects year-over-year comparisons of financial statement items (i.e., because foreign exchange rates fluctuate, similar year-over-year local currency results for a foreign subsidiary may translate into different U.S. dollar results). The following tables present the effects that foreign currency translation had on the year-over-year changes in consolidated net sales and various income statement line items for 2025 compared to 2024 and 2024 compared to 2023:

For the YearEnded December 31, Increase(Decrease) Dueto Foreign

(In millions) 2025 2024 Increase(Decrease) CurrencyTranslation

24

For the YearEnded December 31, Increase(Decrease) Dueto Foreign

(In millions) 2024 2023 Increase(Decrease) CurrencyTranslation

Results of Operations

2025 Compared with 2024

Summary

Net income in 2025 decreased $3.5 million, or seven percent, to $46.9 million, or $2.05 per diluted share, from $50.4 million, or $2.20 per diluted share in 2024. Adjusted net income was $41.7 million, or $1.82 per diluted share in 2025 versus $50.5 million, or $2.20 per diluted share in 2024 (see the “Reconciliation of Non-GAAP Adjusted Net Income and Diluted Earnings per Share” section of this MD&A for a reconciliation between reported net income and reported earnings per diluted share and non-GAAP adjusted net income and adjusted earnings per diluted share). Earnings before interest, taxes, depreciation and amortization (EBITDA) were $208.0 million in 2025, up 11 percent, versus $186.9 million in 2024. Adjusted EBITDA was $198.9 million in 2025, up six percent, versus $187.0 million in 2024. (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. A detailed discussion of segment operating performance for 2025, compared to 2024, follows the summary.

Consolidated net sales increased $151.8 million, or seven percent, between years. Higher average selling prices positively impacted the year-over-year change in net sales by $130.7 million. The increase in average selling prices was mainly attributable to the pass-through of higher raw material costs and more favorable product mix. Consolidated sales volume increased one percent and positively impacted the year-over-year change in net sales by $16.5 million. Consolidated sales volume, excluding the impact of the Philippines asset divestiture, increased two percent. Polymer and Specialty Products sales volume increased eight percent and 15 percent, respectively. Surfactant sales volume decreased two percent. Foreign currency translation favorably impacted the year-over-year change in net sales by $4.6 million, primarily due to a weaker U.S. dollar against the European euro, British pound sterling and Polish zloty, partially offset by a stronger U.S. dollar against the Mexican peso and Brazilian real.

Operating income in 2025 increased $8.1 million, or 11 percent, versus operating income in 2024. Polymer and Specialty Products operating income increased $2.6 million and $4.7 million, respectively, year-over-year. Surfactant operating income decreased $18.2 million in 2025 versus 2024. Corporate expenses, including deferred compensation, environmental remediation, a $6.2 million goodwill impairment charge and $15.9 million of gains recognized on the sale of assets, decreased $19.0 million, or 25 percent, year-over-year. Prior year corporate expenses included a $6.8 million charge associated with an external criminal social engineering fraud scheme. Foreign currency translation had a $0.8 million negative impact on operating income year-over-year.

Operating expenses (including deferred compensation, a goodwill impairment charge and gains on the sale of assets) decreased $10.4 million, or five percent, year-over-year. Changes in the individual income statement line items that comprise the Company’s operating expenses were as follows:

•

Selling expenses increased $3.1 million, or seven percent, between years primarily due to higher salaries, fringe benefits and bad debt provision expense in 2025 versus 2024.

•

Administrative expenses decreased $7.5 million, or eight percent, year-over-year primarily due to the non-recurrence of a $6.8 million charge related to an external criminal social engineering fraud scheme and the non-recurrence of CEO transition expenses incurred in 2024.

•

Research, development and technical service (R&D) expenses increased $3.6 million, or six percent, year-over-year primarily due to higher salaries and fringe benefits.

•

Deferred compensation was $2.2 million of expense in both 2025 and 2024. See the Overview and Segment Results - Corporate Expenses sections of this MD&A for further details.

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•

The Company recorded a $6.2 million goodwill impairment expense, related to its Mexican reporting unit, in 2025. The Company did not incur any goodwill impairment expense in 2024. See Note 4, Goodwill and Other Intangible Assets, of the notes to the Company’s consolidated financial statements (included in Item 8 of this Form 10-K) for additional details.

•

During the fourth quarter of 2025, the Company completed the sale of its Stepan Philippines Quaternaries, Inc. (SPQI) manufacturing assets located in Bauan, Batangas, Philippines to Masurf, Inc, a subsidiary of Musim Mas Holdings Pte. Ltd. As part of the transaction, SPQI entered into a tolling agreement with Masurf, Inc. for the continued service of SPQI customers in Southeast Asia. The gain recognized on the sale of the assets was $5.1 million. See Note 20, Sales of Assets, of the notes to the Company’s consolidated financial statements (included in Item 8 of this Form 10-K) for more details.

•

During the fourth quarter 2025, the Company successfully closed on the sale of its manufacturing assets located in Lake Providence, Louisiana. This transaction followed the Company’s divestiture of its plant in the Philippines, representing the Company's ongoing footprint optimization efforts and focus on core growth opportunities. The gain recognized on the sale was $10.8 million. See Note 20, Sales of Assets, of the notes to the Company’s consolidated financial statements (included in Item 8 of this Form 10-K) for more details.

Net interest expense in 2025 increased $7.9 million, or 56 percent, versus the prior year. This increase was primarily attributable to lower U.S. capitalized interest income recognized in 2025 as the Company’s new specialty alkoxylation facility in Pasadena, Texas started up in April 2025.

Other, net was $3.5 million of income in 2025 versus $4.1 million of income in 2024. The Company recognized $2.8 million of investment gains (including realized and unrealized gains and losses) for the Company’s deferred compensation and supplemental defined contribution mutual fund assets in 2025 compared to $4.6 million of investment gains in 2024. In addition, the Company recognized $0.2 million of foreign exchange gains in 2025 versus $1.4 million of foreign exchange losses in 2024. The Company also recognized $0.5 million of net periodic pension and other retirement obligations income in 2025 versus $1.0 million of income in 2024.

The Company’s effective tax rate was 21.7 percent in 2025 versus 16.7 percent in 2024. The increase of the 2025 effective tax rate was primarily attributable to a favorable non-recurring deferred tax adjustment in 2024 related to two of the Company’s Latin America subsidiaries and a decrease in the amount of qualified tax credits year-over-year. These two items were partially offset by the Company settling an audit in one jurisdiction earlier in 2025. See Note 9, Income Taxes, of the notes to the Company’s consolidated financial statements (included in Item 8 of this Form 10-K) for a reconciliation of the statutory U.S. federal income tax rate to the effective tax rate.

Segment Results

(In thousands) For the YearEnded December 31,

Net Sales 2025 2024 Increase(Decrease) PercentChange

(In thousands) For the YearEnded December 31,

Operating Income 2025 2024 Increase(Decrease) PercentChange

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Surfactants

Surfactant net sales in 2025 increased $133.9 million, or nine percent, versus the prior year. Higher average selling prices favorably impacted the change in net sales by $167.2 million. The higher average selling prices were primarily due to the pass-through of higher raw material costs and more favorable product mix. Sales volume decreased two percent and unfavorably impacted the change in net sales by $27.7 million. Sales volume, excluding the impact of the Philippines asset divestiture, decreased one percent. Foreign currency translation had a $5.6 million unfavorable impact on the year-over-year change in net sales. A year-over-year comparison of net sales by region follows:

For the YearEnded December 31,

(In thousands) 2025 2024 Increase(Decrease) PercentChange

Net sales for North American operations increased $60.0 million, or seven percent, between years. Higher average selling prices had a $62.4 million favorable impact on the year-over-year change in net sales. The higher average selling prices were primarily due to the pass-through of higher raw material costs and more favorable product mix. Sales volume declined less than one percent and negatively impacted the change in net sales by $1.6 million. Lower demand for products sold into the consumer products end markets was largely offset by higher demand for products sold into the agricultural and oilfield end markets and to our distribution partners. Foreign currency translation negatively impacted the change in net sales by $0.8 million.

Net sales for European operations increased $43.2 million, or 16 percent, primarily due to higher average selling prices, which had a $34.7 million positive impact on the change in net sales. The higher average selling prices were primarily due to the pass-through of higher raw material costs and more favorable product mix. Sales volume decreased one percent and negatively impacted the change in net sales by $2.6 million. Lower demand for products sold into the consumer products end markets and to our distribution partners was largely offset by higher demand for products sold into the agricultural and oilfield end markets. Foreign currency translation positively impacted the year-over-year change in net sales by $11.1 million. A weaker U.S. dollar relative to the British pound sterling and European euro led to the favorable foreign currency translation effect.

Net sales for Latin American operations increased $37.6 million, or 12 percent, primarily due to higher average selling prices that positively impacted the year-over-year change in net sales by $61.5 million. The higher average selling prices primarily reflect more favorable product mix and the pass-through of higher raw material costs. Sales volume decreased three percent and negatively impacted the change in net sales by $8.1 million. The decrease in sales volume was primarily due to lower demand for products sold into the commodity laundry and cleaning end markets that was partially offset by higher demand for products sold into the industrial cleaning and personal care end markets. A stronger U.S. dollar relative to all currencies within the region led to a $15.8 million unfavorable foreign currency translation effect.

Net sales for Asian operations decreased $6.9 million, or 13 percent, year-over-year. An 18 percent decline in sales volume had a $9.8 million unfavorable impact on the year-over-year change in net sales. The lower sales volume was mainly due to the SPQI asset divestiture in the Philippines. Higher average selling prices had a $3.0 million favorable impact on the year-over-year change in net sales and foreign currency translation negatively impacted the change in net sales by $0.1 million.

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Surfactant operating income for 2025 decreased $18.3 million, or 21 percent, between years. Gross profit decreased $11.4 million, or six percent, and operating expenses increased $6.8 million, or seven percent. Year-over-year comparisons of gross profit by region and total segment operating expenses and operating income follow:

For the YearEnded December 31,

(In thousands) 2025 2024 Increase(Decrease) PercentChange

Gross Profit and Operating Income

Gross profit for North American operations decreased $20.0 million, or 20 percent, versus the prior year primarily due to lower average unit margins. The lower average unit margins negatively impacted the year-over-year change in gross profit by $19.8 million and were primarily attributable to higher expenses associated with the start-up of the Company’s new alkoxylation facility in Pasadena, Texas, higher oleochemical raw material costs and an environmental reserve adjustment related to the Company’s Elwood, Illinois site. A slight decline in sales volume negatively impacted the year-over-year change in gross profit by $0.2 million.

Gross profit for European operations increased $4.5 million, or 14 percent, primarily due to higher average unit margins and the favorable impact of foreign currency translation. These items positively impacted the year-over-year change in gross profit by $3.4 million and $1.4 million, respectively. The higher average unit margins primarily reflect a more favorable product mix. A one percent decrease in sales volume negatively impacted the year-over-year change in gross profit by $0.3 million.

Gross profit for Latin American operations increased $0.9 million, or two percent, primarily due to higher average unit margins. The higher average unit margins positively impacted the year-over-year change in gross profit by $4.5 million and primarily reflect a more favorable product mix. A three percent decrease in sales volume and the unfavorable impact of foreign currency translation negatively impacted the change in gross profit by $1.0 million and $2.6 million, respectively.

Gross profit for Asian operations increased $3.2 million or 45 percent, year-over-year primarily due to higher average unit margins. The higher average unit margins favorably impacted the year-over-year change in gross profit by $4.5 million. An 18 percent decline in sales volume negatively impacted the year-over-year change in gross profit by $1.3 million.

Operating expenses for the Surfactant segment increased $6.8 million, or seven percent, year-over-year. Most of this increase was attributable to higher salaries, fringe benefits and bad debt provision expense in 2025 versus 2024.

Polymers

Polymer net sales in 2025 decreased $0.4 million versus the prior year. An eight percent increase in sales volume and the favorable impact of foreign currency translation positively impacted the change in net sales by $48.7 million and a $9.7 million, respectively. Lower average selling prices negatively impacted the year-over-year change in net sales by $58.8 million. A comparison of net sales by region follows:

For the YearEnded December 31,

(In thousands) 2025 2024 Increase(Decrease) PercentChange

Net sales for North American operations increased $24.7 million, or nine percent, primarily due to a 20 percent increase in sales volume which positively impacted the year-over-year change in net sales by $57.6 million. Sales volume within the commodity phthalic anhydride business more than doubled mainly due to the market exit of a competitor and the non-recurrence of operational issues at the Company’s Elwood, Illinois (Millsdale) site during 2024. Sales volume of polyols used in rigid foam applications and specialty polyols

28

increased one and four percent, respectively, year-over-year. Lower average selling prices negatively impacted the year-over-year change in net sales by $32.9 million. The lower average selling prices primarily reflect the pass-through of lower raw material costs and less favorable product mix.

Net sales for European Polymer operations decreased $23.2 million, or nine percent, year-over-year. Lower average selling prices and a one percent decline in sales volume negatively impacted the year-over-year change in net sales by $30.2 million and $2.7 million, respectively. The lower average selling prices were mainly due to pass-through of lower raw material costs and increased competitive activity. Foreign currency translation positively impacted the change in net sales by $9.7 million. A weaker U.S. dollar relative to the Polish zloty and British pound sterling led to the favorable foreign currency translation effect.

Net sales for Asian and Other operations decreased $1.9 million, or four percent, primarily due to lower average selling prices. Lower average selling prices negatively impacted the year-over-year change in net sales by $1.7 million. Sales volume was down less than one percent and negatively impacted the change in net sales by $0.2 million. The slight decrease in sales volume reflects lower demand for polyols used in rigid foam applications that was mostly offset by higher demand for specialty polyols resulting from the Company’s product diversification efforts.

Polymer operating income for 2025 increased $2.6 million, or seven percent, versus operating income for 2024. Gross profit increased $3.6 million, or five percent, and operating expenses were up $1.0 million, or four percent, year-over-year. Year-over-year comparisons of gross profit by region and total segment operating expenses and operating income follow:

For the YearEnded December 31,

(In thousands) 2025 2024 Increase(Decrease) PercentChange

Gross Profit and Operating Income

Gross profit for North American operations increased $5.8 million, or 20 percent, year-over-year. The 20 percent increase in sales volume accounted for the year-over-year gross profit change. Average unit margins were constant between years.

Gross profit for European operations decreased $4.8 million, or 15 percent, year-over-year. This decrease was primarily due to lower average unit margins and a one percent decrease in sales volume. These items negatively impacted the change in gross profit by $5.4 million and $0.4 million, respectively. The lower average unit margins primarily reflect increased competitive activity in the region. Foreign currency translation positively impacted the year-over-year change in gross profit by $1.0 million.

Gross profit for Asia and Other operations increased $2.6 million, or 38 percent, primarily due to higher average unit margins that positively impacted the change in gross profit by $2.7 million. The higher average unit margins reflect more favorable product mix resulting from the Company’s diversification efforts.

Operating expenses for the Polymers segment increased $1.0 million, or four percent, year-over-year primarily due to higher salaries.

Specialty Products

Specialty Products net sales in 2025 increased $18.4 million, or 29 percent, versus net sales in 2024. The year-over-year increase in net sales was due to higher average selling prices and a 15 percent increase in sales volume. Gross profit and operating income increased $5.0 million and $4.7 million, respectively. The year-over-year increases in gross profit and operating income were mostly attributable to higher sales volume within the medium chain triglycerides (MCT) product line.

Corporate Expenses

Corporate expenses, which include deferred compensation and other operating expenses that are not allocated to the reportable segments, decreased $19.0 million, or 25 percent, between years. This decrease was mainly due to the non-recurrence of a $6.8 million pre-tax charge, related to a criminal social engineering fraud scheme, recognized in 2024 (see Note 24, Other Matter, of the notes to the

29

Company’s consolidated financial statements included in Item 8 of this Form 10-K). In addition, during the fourth quarter of 2025, the Company recorded $15.9 million of gains on the sale of assets that were not attributed to any segments (see Note 20, Sales of Assets, of the notes to the Company’s consolidated financial statements included in Item 8 of this Form 10-K). Partially offsetting the above, the Company recorded a $6.2 million goodwill impairment charge during the fourth quarter 2025 (see Note 4, Goodwill and Other Intangibles, of the notes to the Company’s consolidated financial statements included in Item 8 of this Form 10-K). Deferred compensation expenses were $2.2 million in both 2025 and in 2024. 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

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 Company’s principal uses of cash have included funding operating activities, capital investments and acquisitions. The Company’s generation of cash from operations, cash on hand, committed credit facilities and ability to access capital markets are expected to meet the Company’s short-term and long-term cash requirements for working capital, capital expenditures, debt maturities, contributions to pension plans, dividend distributions to stockholders, share repurchases and other needs.

For 2025, cash generated from operating activities was a cash source of $147.9 million versus a source of $162.1 million in 2024. For 2025, investing cash outflows were $89.0 million versus cash outflows of $116.9 million in 2024. Financing activities were a cash use of $35.4 million in 2025 versus a cash use of $64.5 million in 2024. Cash and cash equivalents increased by $33.0 million compared to December 31, 2024, inclusive of a $9.6 million favorable foreign exchange rate impact.

As of December 31, 2025, the Company’s cash and cash equivalents totaled $132.7 million including $13.8 million in money market funds and $2.4 million in U.S. demand deposit accounts. Cash and cash equivalents of the Company’s non-U.S. subsidiaries held outside the U.S. totaled $116.5 million as of December 31, 2025. As of December 31, 2024, the Company’s cash and cash equivalents totaled $99.7 million. Cash in U.S. demand deposit accounts and money market funds totaled $1.2 million and $12.6 million, respectively. The Company’s non-U.S. subsidiaries held $85.9 million of cash outside the United States as of December 31, 2024.

Operating Activities

Net income decreased $3.5 million, or seven percent, in 2025 versus the prior year. Working capital was a cash use of $15.8 million in 2025 versus a cash source of $5.8 million in 2024.

Accounts receivable were a cash source of $23.7 million in 2025 compared to a cash source of $9.0 million in 2024. Inventories were a cash source of $0.5 million in 2025 versus a cash use of $37.2 million in 2024. Accounts payable and accrued liabilities were a cash use of $32.7 million in 2025 compared to a cash source of $34.0 million in 2024.

Working capital requirements were higher in 2025 compared to 2024 primarily due to the changes noted above. The change in inventories working capital primarily reflects the Company’s efforts to reduce inventory levels during 2025. The change in accounts payable and accrued liabilities largely reflects a reduction in raw material purchases due to the Company’s inventory reduction efforts in 2025. It is management’s opinion that the Company’s liquidity is sufficient to provide for working capital requirements during 2026.

Investing Activities

Cash used for investing activities decreased $27.9 million year-over-year and was primarily due to $26.6 million of cash proceeds from the sales of assets in 2025. Cash used for capital expenditures was $122.5 million in 2025 versus $122.8 million in 2024.

For 2026, the Company estimates that total capital expenditures will be in the range of $100.0 million to $110.0 million.

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Financing Activities

Cash flow from financing activities was a use of $35.4 million in 2025 versus a use of $64.5 million in 2024. The year-over-year change was primarily due to the issuance of $75.0 million aggregate principal amount of senior unsecured notes in 2025, partially offset by lower borrowings against the Company’s revolving credit facility in 2025 versus 2024.

The Company purchases shares of its common stock in the open market or from its benefit plans from time to time to fund its own benefit plans and to mitigate the dilutive effect of new shares issued under its compensation plans. The Company may, from time to time, seek to purchase additional amounts of its outstanding equity and/or retire debt securities through cash purchases and/or exchanges for other securities, in open market purchases, privately negotiated transactions or otherwise, including pursuant to plans meeting the requirements of Rule 10b5-1 promulgated by the SEC. 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. At December 31, 2025, the Company had $125.1 million remaining under the share repurchase program authorized by its Board of Directors.

Debt and Credit Facilities

Consolidated balance sheet debt increased $1.3 million, from $625.4 million on December 31, 2024 to $626.7 million on December 31, 2025, primarily due to the issuance of $75.0 million aggregate principal amount of senior unsecured notes during the second quarter of 2025, mostly offset by scheduled debt repayments and lower borrowings against the Company’s revolving credit facility. On May 21, 2025, pursuant to a note purchase and private shelf agreement dated as of June 10, 2021, Stepan issued and sold $37.5 million in aggregate principal amount of its 6.17% Senior Notes, Series 2025-A, due May 21, 2033 (the Series 2025-A Notes). On May 21, 2025, pursuant to a note purchase and master note agreement dated as of June 10, 2021, Stepan issued and sold $37.5 million in aggregate principal amount of its 6.17% Senior Notes, Series 2025-B, due May 21, 2033 (together with the Series 2025-A Notes, the Notes). The Notes will bear interest at a fixed rate of 6.17% with interest to be paid semi-annually. Principal amortization for the Notes is contractually scheduled with equal annual payments beginning on May 21, 2029 and on each May 21 thereafter to and including May 21, 2032, with the final outstanding principal balance due at maturity on May 21, 2033.

Net debt (which is defined as total debt minus cash – see the “Reconciliation of Non-GAAP Net Debt” section of this MD&A) was $494.0 million on December 31, 2025 versus $525.7 million at December 31, 2024. As of December 31, 2025, the ratio of net debt to net debt plus shareholders’ equity was 28.0 percent versus 31.0 percent at December 31, 2024 (see the “Reconciliation of Non-GAAP Net Debt” section in this MD&A for further details). On December 31, 2025, the Company’s debt included $324.0 million of unsecured notes, with maturities ranging from 2026 through 2033, that were issued to insurance companies in private placement transactions pursuant to note purchase agreements, an $83.8 million delayed-draw term loan borrowed pursuant to the Company’s credit agreement and $218.9 million of short-term loans borrowed under the Company’s revolving credit facility. As of December 31, 2025, the Company had outstanding letters of credit of $12.8 million, inclusive of $4.1 million issued under the Company’s revolving credit facility. The proceeds from the note issuances have been the Company’s primary source of long-term debt financing and are supplemented by borrowings under bank credit facilities to meet short and medium-term liquidity needs.

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. The Company's credit agreement with Credit Industriel et Commercial NY (the CIC Credit Agreement) provides for a credit facility in an aggregate principal amount of $8.7 million. The facility is for the sole purpose of the issuance of standby letters of credit. 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. These outstanding letters of credit totaled $4.1 million at December 31, 2025.

The Company anticipates that cash from operations, committed credit facilities and cash on hand will be sufficient to fund anticipated capital expenditures, working capital, dividends and other planned financial commitments for the foreseeable future.

Certain foreign subsidiaries of the Company maintain short-term bank lines of credit in their respective local currencies to meet working capital requirements as well as to fund capital expenditures and acquisitions. At December 31, 2025, the Company’s foreign subsidiaries did not have any outstanding debt.

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The Company is subject to covenants under its material debt agreements that require the maintenance of minimum interest coverage and minimum net worth. These debt covenants also limit the incurrence of additional debt as well as the payment of dividends and repurchase of shares. Under the most restrictive of these debt covenants:

3. The Company is required to maintain net worth of at least $750.0 million.

The Company believes it was in compliance with the covenants under its material debt agreements as of December 31, 2025.

Material Cash Requirements

At December 31, 2025, the Company’s material cash requirements included the following contractual obligations (including estimated payments by period):

Payments Due by Period

(In thousands) Total Less than1 year 1-3 years 3 – 5 years More than5 years

(1)

Excludes unamortized debt issuance costs of $0.3 million.

(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.

(4)

Purchase obligations consist of raw material, utility and telecommunication service purchases made in the normal course of business.

(5)

The “Other” category comprises deferred revenues that represent commitments to deliver products, estimated payments related to the Company’s unfunded defined benefit supplemental executive and outside director pension plans, estimated payments (undiscounted) related to the Company’s asset retirement obligations, environmental remediation payments for which amounts and periods can be reasonably estimated and income tax liabilities for which payments and periods can be reasonably estimated and payments related to the Company’s voluntary early retirement plan.

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). The significant non-current liabilities excluded from the table are defined benefit pension, deferred compensation, environmental and legal liabilities for which payment periods cannot be reasonably determined. In addition, deferred income tax liabilities are excluded from the table due to the uncertainty of their timing.

During the periods covered by this Form 10-K, the Company was not party to any off-balance sheet arrangements that have or are reasonably likely to have a material current or future effect on the Company’s financial condition, revenues or expenses, results of operations, liquidity, cash requirements or capital resources.

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Pension Plans

The Company sponsors a number of defined benefit pension plans, the most significant of which cover employees in the Company’s U.S. and U.K. locations. The U.S. and U.K. plans are frozen, and service benefit accruals are no longer being made. The overfunded status (pretax) of the Company’s U.S and U.K. defined benefit pension plans was $2.7 million at December 31, 2025, versus overfunded status (pretax) of $2.3 million at December 31, 2024. See Note 13, Postretirement Benefit Plans, of the notes to the Company’s consolidated financial statements (included in Item 8 of this Form 10-K) for additional details.

The Company contributed $0.2 million to its U.S. defined benefit plans in 2025. U.K. did not make any defined benefit contributions to its plan in 2025. In 2026, the Company is planning to make $0.9 million contribution to the U.S. qualified defined benefit plans. In addition, the company expects to contribute $0.1 million to the unfunded non-qualified U.S. pension plans.

Letters of Credit

The Company maintains standby letters of credit under its workers’ compensation insurance agreements and for other purposes as needed. The insurance letters of credit are renewed annually and amended to the amounts required by the insurance agreements. As of December 31, 2025, the Company had a total of $4.1 million of outstanding standby letters of credit from the Credit Agreement with the syndicate of banks and $8.7 million under CIC Credit Agreement.

Environmental and Legal Matters

The Company’s operations are subject to extensive federal, state and local environmental laws and regulations and similar laws in the other countries in which the Company does business. Although the Company’s environmental policies and practices are designed to ensure compliance with these laws and regulations, future developments and increasingly stringent environmental regulation may require the Company to make additional unforeseen environmental expenditures. The Company will continue to invest in the equipment and facilities necessary to comply with existing and future regulations. During 2025, the Company’s expenditures for capital projects related to environmental matters were $9.8 million. These projects are capitalized and depreciated over their estimated useful lives, which are typically 10 years. Recurring costs associated with the operation and maintenance of facilities for waste treatment and disposal and managing environmental compliance in ongoing operations at the Company’s manufacturing locations were $44.9 million for 2025, $51.3 million for 2024 and $38.3 million for 2023.

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. 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. It is the Company’s accounting policy to record liabilities when environmental assessments, remediation expenses or legal proceeding losses are probable, and the cost or range of possible costs can be reasonably estimated. When no amount within the range is a better estimate than any other amount, the minimum is accrued. Estimating the possible costs of environmental remediation requires making assumptions related to the nature and extent of contamination and the methods and resulting costs of remediation. Some of the factors on which the Company bases its estimates include information provided by decisions rendered by State and Federal environmental regulatory agencies, information provided by feasibility studies, and remedial action plans developed. After partial remediation payments at certain sites, the Company has estimated a range of possible environmental and legal losses of $19.3 million to $46.0 million at December 31, 2025, and $20.0 million to $44.5 million at December 31, 2024. Within the range of possible environmental 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. The Company’s environmental and legal accruals totaled $19.3 million at December 31, 2025 as compared to $20.0 million at December 31, 2024. During 2025, cash expenditures related to environmental remediation and certain other legal matters approximated $4.6 million compared to $7.0 million in 2024.

For certain sites, the Company has responded to information requests made by federal, state or local government agencies but has received no response confirming or denying the Company’s stated positions. 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. 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.

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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.

Critical Accounting Estimates and Policies

The Company prepares its financial statements in accordance with accounting principles generally accepted in the United States of America (generally accepted accounting principles or GAAP). Preparation of financial statements in accordance with generally accepted accounting principles requires the Company to make estimates and assumptions that affect the reported amounts of assets, liabilities, income and expenses at the date of the financial statements and to provide disclosures of contingent assets, liabilities and related amounts of revenues and expenses during the reporting period. The following is a summary of the accounting policies the Company believes are the most important to aid in understanding its financial results:

Environmental Liabilities

It is the Company’s accounting policy to record environmental liabilities when environmental assessments and/or remedial efforts are probable, and the cost or range of possible costs can be reasonably estimated. When no amount within a range of possible costs is a better estimate than any other amount, the minimum amount in the range is accrued. Estimating the possible costs of remediation requires making assumptions related to the nature and extent of contamination and the methods and resulting costs of remediation. Some of the factors on which the Company bases its estimates include information provided by discussions with and decisions rendered by State and Federal environmental regulatory agencies, information provided by feasibility studies, and remedial action plans developed.

Estimates for environmental liabilities are subject to potentially significant fluctuations as new facts emerge related to the various sites where the Company is exposed to liability for the remediation of environmental contamination. See the Environmental and Legal Matters section of this MD&A for discussion of the Company’s recorded liabilities and range of cost estimates.

Goodwill

The Company’s intangible assets include goodwill acquired as part of business or product line acquisitions. Goodwill represents the excess of cost over the fair value of net assets acquired in a business combination. Goodwill is not amortized but is tested for impairment on a reporting unit level. The Company’s reporting units are typically defined as one level below operating segments and highly correlated to geographic regions. The Company tests goodwill for impairment annually (the Company conducts its goodwill impairment testing during the second quarter of each calendar year), or more frequently when events or changes in circumstances indicate it is more likely than not that the fair value of the reporting unit to which goodwill relates has declined below its carrying value. In this case, the Company would recognize an impairment charge for the amount by which the carrying value exceeds the reporting unit’s fair value. Goodwill is evaluated for impairment using qualitative and/or quantitative testing procedures. The Company has the option to first perform qualitative testing to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If the Company chooses not to complete a qualitative assessment for a given reporting unit, or if the initial assessment indicates that it is more likely than not that the estimated fair value of a reporting unit is less than its carrying value, additional quantitative testing is performed.

When estimating a reporting unit’s fair value as part of the quantitative assessment, the Company uses a combination of market and income-based methodologies. The market approach uses a combination of EBITDA and EBITDA multiples to estimate a reporting unit’s fair value. EBITDA multiples typically mirror similar businesses or comparative companies whose securities are actively traded in public markets. Significant degradation of either EBITDA or EBITDA multiples could result in a triggering event, requiring goodwill to be tested for impairment during an interim period. The income approach takes into consideration multiple variables, including forecasted sales volume and operating income, current industry and economic conditions, historical results and other elements to calculate the present value of future cash flows. 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. See Note 4, Goodwill and Other Intangible Assets, of the notes to the Company’s consolidated financial statements (included in Item 8 of this Form 10-K) for additional information.

At December 31, 2025, the Company conducted additional sensitivity analysis on certain assumptions used in the valuation of its European polymers reporting unit due to a decline in earnings. The decline in earnings was primarily due to slightly lower sales volume and unit margins. At December 31, 2025, the goodwill related to the European polymers reporting unit was $47.8 million. The Company used both market and income-based methodologies to assess the fair value of its European polymers reporting unit. Both approaches required the Company to make significant economic-related assumptions. Based on the Company’s analysis, the fair value of the European polymers reporting unit was greater than its carrying value, and as a result, the Company did not record any impairment charge

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as of December 31, 2025. Holding all other assumptions constant, a 100 basis point increase in the discount rate would not result in impairment nor would a 1.5 decrease in the multiple used in the market-based computation result in an impairment.

Net Operating Loss Carryforwards

As of December 31, 2025, the Company had approximately $32.0 million in net Deferred Tax Assets (DTAs). These DTAs include approximately $60.0 million related to U.S. Federal net operating loss (NOL) carryforwards that can be used to offset taxable income in future periods and reduce our income taxes payable in those future periods. One of the primary drivers of the 2025 NOL was the Pasadena, Texas facility assets being placed in service in 2025 which qualified for Bonus depreciation. While these U.S. Federal NOL carryforwards have an indefinite carryforward period with certain annual limitations, a valuation allowance is needed if projected future income is insufficient to utilize the NOLs. At this time, the Company considers it more likely than not that it will have sufficient taxable income in the future that will allow the Company to realize these DTAs. However, it is possible that some or all of these NOL carryforwards could ultimately remain unused. This could require a substantial valuation allowance which would materially increase the Company’s income tax expense in the period the valuation allowance is recognized and materially adversely affect our results of operations and statement of financial condition.

Recent Accounting Pronouncements

See Note 1, Summary of Significant Accounting Policies, of the notes to the Company’s consolidated financial statements (included in Item 8 of this Form 10-K) for information on recent accounting pronouncements which affect the Company.

Non-GAAP Reconciliations

The Company believes that certain non-GAAP measures, when presented in conjunction with comparable GAAP measures, are useful for evaluating the Company’s performance and financial condition. Internally, the Company uses this non-GAAP information as an indicator of business performance and evaluates management’s effectiveness with specific reference to these indicators. Management uses these non-GAAP financial measures to assist in analyzing what management views as the Company’s core operating performance for purposes of business decision making. Management believes that presenting these non-GAAP financial measures provides investors with useful supplemental information because they (i) provide meaningful supplemental information regarding financial performance by excluding items affecting comparability between periods, (ii) permit investors to view performance using the same tools that management uses to budget, make operating and strategic decisions and evaluate the Company’s core operating performance across periods, and (iii) otherwise provide supplemental information that may be useful to investors in evaluating the Company’s financial results. In addition, the Company believes that the presentation of these non-GAAP financial measures, when considered together with the most directly comparable GAAP financial measures and the reconciliations to those GAAP financial measures, provides investors with additional tools to understand the factors and trends affecting the Company’s underlying business than could be obtained absent these disclosures. These measures should be considered in addition to, not as substitutes for or superior to, measures of financial performance prepared in accordance with GAAP and there are limitations to using non-GAAP financial measures. For example, the non-GAAP financial measures presented in this Form 10-K may differ from similarly titled non-GAAP financial measures presented by other companies and other companies may not define these non-GAAP financial measures the same way as the Company does.

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Reconciliations of Non-GAAP Adjusted Net Income and Diluted Earnings per Share

Management uses the non-GAAP adjusted net income metric to evaluate the Company’s operating performance. Management excludes the items listed in the table below because they are non-operational items. The cumulative tax effect was calculated using the statutory tax rates for the jurisdictions in which the transactions occurred.

Twelve Months Ended December 31

Goodwill and Other Intangibles Impairment Expense 6.2 0.27 — — 2.00 0.09

Cash Settled Stock Appreciation Rights (Income) — — — — (0.1 ) —

Gain on Sales of Assets (15.9 ) (0.69 ) — — — —

Cumulative Tax Effect on Above Adjustment Items 3.9 0.17 (0.1 ) — (3.7 ) (0.16 )

Reconciliations of Non-GAAP EBITDA and Adjusted EBITDA

Management uses the non-GAAP EBITDA and adjusted EBITDA metric to evaluate the Company’s operating performance. Management excludes the items listed in the table below because they are non-operational items. Refer to the Company’s Consolidated Statements of Income for a bridge between Operating Income and Net Income.

For the YearEnded December 31,

Depreciation and Amortization 126.0 112.2

Other, Net Income 3.5 4.1

Deferred Compensation (0.6 ) (2.4 )

Environmental Remediation 1.2 2.6

Goodwill Impairment 6.2 —

Gain on Sales of Assets (15.9 ) —

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Reconciliations of Non-GAAP Net Debt

Management uses the non-GAAP net debt metric to show a more complete picture of the Company’s overall liquidity, financial flexibility and leverage level.

December 31

Current Maturities of Long-Term Debt as Reported $ 285.7 $ 292.8

Less Cash and Cash Equivalents as Reported (132.7 ) (99.7 )

Net Debt/Net Debt plus Equity 28 % 31 %

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Foreign Currency Exchange Risk

Because the Company operates globally, its cash flows and operating results are subject to movements in foreign currency exchange rates. Except for the financial transactions, balances and forward contracts referred to below, most of the Company’s foreign subsidiaries’ financial instruments are denominated in their respective functional currencies.

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. The fair value of all forward contracts as of December 31, 2025, was a net asset of $0.1 million. As of December 31, 2025, the potential reduction in the Company’s earnings resulting from the impact of hypothetical adverse changes in exchange rates on the fair value of its outstanding foreign currency contracts of 10 percent for all currencies would have been $4.2 million.

Interest Rates

The Company’s debt was comprised of $324.0 million fixed-rate borrowings and $302.7 million variable-rate borrowings. Foreign subsidiaries did not have any debt as of December 31, 2025. A hypothetical 10 percent average change to short-term interest rates would result in a $1.6 million (assuming the same debt level as December 31, 2025) increase or decrease to interest expense for 2026.

The fair value of the Company’s long term fixed-rate debt, including current maturities, was estimated to be $316.3 million as of December 31, 2025, which was approximately $8.0 million below the carrying value. 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.

Commodity Price Risk

Certain raw materials used in the manufacture of the Company’s products are subject to price volatility caused by weather, petroleum price fluctuations, general economic demand and other unpredictable factors. Increased raw material costs are recovered from customers as quickly as the marketplace allows; however, certain contractual arrangements allow for price changes only on a quarterly basis, and competitive pressures sometimes prevent the recovery of cost increases from customers, particularly in periods where there is excess industry capacity. As a result, for some product lines or market segments it may take time to recover raw material price increases. Periodically, firm purchase commitments are entered into which fix the price of a specific commodity that will be delivered at a future time. Forward purchase contracts are used to aid in managing the Company’s natural gas costs. At December 31, 2025, the Company had open forward contracts for the purchase of 0.6 million dekatherms of natural gas at a cost of $2.3 million. 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.

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Item 8. 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

Notes to Consolidated Financial Statements 48

Report of Independent Registered 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”). 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.

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.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

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Goodwill — European Polymers— Refer to Notes 1 and Note 4 to the Financial Statements

Critical Audit Matter Description

The Company's goodwill for its reporting units is tested annually for impairment during the second quarter of each year, and more frequently if events and circumstances indicate that the assets might be impaired. The Company's evaluation of its goodwill for impairment involves the comparison of the fair value of the reporting units to its carrying value.

The Company elected to use a quantitative approach to determine the fair value of the Stepan European Polymers reporting unit based upon the income method and the market-based method based on EBITDA multiples to determine the fair value of its reporting unit. The fair value determination using the discounted cash flow method requires management to make significant estimates and assumptions related to forecasts of future revenues and earnings before interest, taxes, depreciation, and amortization (EBITDA) and the discount rate. The determination of the fair value using the market-based method requires management to make assumptions related to marketplace EBITDA multiples from within a peer public company group. The goodwill balance allocated to the European Polymers reporting unit was $47.0 million at December 31, 2025. The European Polymers reporting unit goodwill is included in the Company’s goodwill balance of $92.8 million at December 31, 2025. The fair value of the European Polymers reporting unit was greater than its carrying value as of the measurement date, and as a result, management did not record an impairment charge related to the reporting unit goodwill.

Given the significant judgments made by management to estimate the fair value of the European Polymers reporting unit, performing audit procedures to evaluate the reasonableness of management's estimates and assumptions related to forecasts of future EBITDA, as well as the calculation of the discount rate and the selection of multiples applied to management's forecasted EBITDA estimates for the European Polymers reporting unit, required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the fair value of the goodwill discussed above included the following, among others:

•

We tested the effectiveness of controls over the goodwill impairment evaluations, including those over the appropriateness of the valuation methodology, forecast of EBITDA, and selection of the discount rate for the reporting unit.

•

We performed a sensitivity analysis of the business and valuation assumptions which included their impact on the income and market approach.

•

With the assistance of our internal fair value specialists, we evaluated the reasonableness of the valuation methodology, and discount rate:

•

Testing the mathematical accuracy of the calculations.

•

Testing the source information underlying the determination of the discount rate and EBITDA multiples.

•

Developing ranges of independent estimates and comparing those to the rates selected by management.

•

We assessed the reasonableness of management’s forecast of future EBITDA by comparing the projections to historical results, forecasted information included in macroeconomic benchmarking reports and certain peer companies. We 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.

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Stepan Company

Consolidated Statements of Income

For the years ended December 31, 2025, 2024 and 2023

Operating Expenses:

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 — —

Other Income (Expense):

Net Income Per Common Share (Note 18):

Shares Used to Compute Net Income Per Common Share (Note 18):

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

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Stepan Company

Consolidated Statements of Comprehensive Income

For the years ended December 31, 2025, 2024 and 2023

Other Comprehensive Income (Loss):

Defined benefit pension plans:

Net defined benefit pension plan activity (Note 19) (986 ) (5,588 ) (1,329 )

Cash flow hedges:

Reclassifications to income in period (10 ) (9 ) (10 )

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

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Stepan Company

Consolidated Balance Sheets

December 31, 2025 and 2024

Assets

Current Assets:

Property, Plant and Equipment:

Liabilities and Equity

Current Liabilities:

Non-current operating lease liability (Note 7) 49,340 57,392

Commitments and Contingencies (Note 16)

Equity (Note 10):

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

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Stepan Company

Consolidated Statements of Cash Flows

For the years ended December 31, 2025, 2024 and 2023

Cash Flows From Operating Activities

Goodwill and other intangibles impairment (Note 4) 6,245 — 2,038

Changes in assets and liabilities, excluding effects of acquisitions:

Environmental and legal liabilities (680 ) (695 ) (11,985 )

Cash Flows From Investing Activities

Proceeds from sales of assets (Note 20) 26,587 — —

Cash Flows From Financing Activities

Other debt borrowings (Note 6) 75,000 — —

Net Cash Provided By (Used In) Financing Activities (35,440 ) (64,520 ) 33,284

Net Increase (Decrease) in Cash and Cash Equivalents 33,023 (30,158 ) (43,927 )

Supplemental Cash Flow Information

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

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Stepan Company

Consolidated Statements of Equity

For the year ended December 31, 2023

STEPAN COMPANY STOCKHOLDERS

Cash dividends paid:

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

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Stepan Company

Consolidated Statements of Equity

For the year ended December 31, 2024

STEPAN COMPANY STOCKHOLDERS

Other comprehensive income (66,236 ) — — — (66,236 ) —

Cash dividends paid:

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

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Stepan Company

Consolidated Statements of Equity

For the year ended December 31, 2025

STEPAN COMPANY STOCKHOLDERS

Issuance of 2,473 shares of common stock under stock option plan 104 2 102 — — —

Cash dividends paid:

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

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Notes to Consolidated Financial Statements

For the years ended December 31, 2025, 2024 and 2023

1. Summary of Significant Accounting Policies

Nature of Operations