Good morning, and welcome to the Stepan Company second quarter 2024 earnings conference call. During the presentation, all participants will be in listen-only mode. Afterward, we will conduct a question-and-answer session. To ask a question during the session, you'll need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. As a reminder, this call is being recorded on Wednesday, July 31st, 2024. It's now my pleasure to turn the call over to Mr. Luis Rojo, Vice President and Chief Financial Officer of Stepan Company. Mr. Rojo, please go ahead. Good morning, and thank you for joining Stepan Company's second quarter 2024 financial review. Before we begin, please note that information in this conference call contains forward-looking statements, which are not historical facts. These statements involve risks and uncertainties that could cause actual results to differ materially, including but not limited to prospects for our foreign operations, global and regional economic conditions, and factors detailing our Securities and Exchange Commission filings. In addition, this conference call will include discussion of adjusted net income, adjusted EBITDA, and free cash flow, which are non-GAAP measures. We provide reconciliations to the comparable GAAP measures in the earnings presentation and press release, which we have made available at www.stepan.com under the Investor section of our website. Whether you're joining us online or over the phone, we encourage you to review the investor slide presentation. We have made this available at approximately the same time as when the earnings release is issued, and we hope that you find the information perspective helpful. With that, I would like to turn the call over to Mr. Scott Behrens, our President and Chief Executive Officer. Good morning, and thank you all for joining us today to discuss our second quarter 2024 results. I plan to share highlights from our second quarter performance, and we'll also share updates on our key strategic priorities, while Luis will provide additional details on our financial results. The company reported second quarter Adjusted EBITDA of $47.7 million, up 4% year-over-year. Global sales volume was also up 4% on a year-over-year basis. We saw a strong volume recovery across most core markets, except for weakness in the agricultural market due to continued inventory destocking and lower phthalic anhydride volumes due to operational issues at our Millsdale site. Global sales volume, excluding the impact of agricultural and phthalic anhydride, was up 6%. Surfactants experienced double-digit volume growth within the laundry and cleaning, construction and industrial solutions, and oil field end markets, and also within our distribution partners. Latin American surfactant volumes grew double digits as we continued to recover consumer volumes in Mexico. We also experienced strong volume growth in several end markets in Brazil, inclusive of double-digit volume growth within our agricultural business. However, North American and European agricultural volumes remained soft in the second quarter. Rigid and specialty polyols also delivered volume growth during the quarter that was partially offset by the lower phthalic anhydride volumes due to the production issues at Millsdale. Overall, global margins were in line with expectations despite unfavorable product mix. On July 18th, 2024, we determined that one of our company's Asia subsidiaries had been the victim of a criminal social engineering scheme, which resulted in fraudulently induced outbound payments. The company launched an investigation led by outside counsel to determine the full extent of the fraud scheme and the related potential exposure. We are limited in what we can disclose because of the ongoing investigation. We initiated contact with our banks as well as our appropriate U.S. and local law enforcement authorities in an effort to, among other things, recover the transferred funds. To date, the company has not found any evidence of additional fraudulent activity, and we believe this event is isolated and contained. This incident did not result in any unauthorized access to our information systems or any confidential customer information or other data that we maintain. While this matter will result in some additional near-term expenses, the company does not expect this incident to otherwise have a material impact on its business. The company recognized a $3.5 million pre-tax charge for the quarter ended June 30th, 2024, and while the investigation is ongoing, the company expects to record a pre-tax charge of a similar amount in the third quarter of this year. We do not expect this incident to otherwise have a material impact on our business or our ability to serve our customers. From an earnings perspective, we delivered Adjusted EBITDA growth of 4% during the second quarter, despite higher operating costs at our Millsdale site, higher pre-commissioning expenses at our new alkoxylation investment in Pasadena, Texas, the negative effect of agricultural destocking, and the impact of the fraud event mentioned before. Excluding these second quarter special events, our Adjusted EBITDA grew more than 50% versus prior year. Net sales in the second quarter of 2024 decreased 4% year-over-year, primarily due to lower selling prices that were mainly attributable to the pass-through of lower raw material costs and less favorable product mix. These lower selling prices were partially offset by a 4% increase in global sales volume, as mentioned before. For the first half of 2024, adjusted EBITDA of $98.9 million was up 5% versus the prior year, as global sales volume grew 2% year-over-year, excluding the declines in our agricultural and commodity phthalic anhydride businesses, volume was up 5% when compared to the first six months of 2023. Free cash flow in the second quarter was close to zero due to a seasonal increase of $13 million in inventory. We generally build inventories in the second quarter in preparation for hurricane season. We also have two upcoming biannual planned turnarounds within our polymers business, where inventory builds assist in meeting our customers' demand during the turnarounds. Free cash flow for the first half of the year was $11 million, and we remain confident that we will close 2024 with positive free cash flow. The company is on track to deliver our $50 million cost reduction goal for 2024 through the ongoing disciplined efforts in the supply chain and the workforce productivity actions taken in the last quarter of 2023. We expect these reductions to help offset higher operating costs at our Millsdale site and pre-commissioning expenses at our new ethoxylation facility in Pasadena, Texas. During the second quarter of 2024, the company paid $8.4 million in dividends to shareholders. The company did not repurchase any company stock during the first half of 2024 and has $125 million remaining under the share repurchase program authorized by our board of directors. Yesterday, our board of directors declared a quarterly cash dividend on Stepan common stock of $0.375 per share, payable on September 13th, 2024. Stepan has paid and increased its dividend for 56 consecutive years. First half volume growth within several of our core markets at healthy margins is a testament to the strength and diversity of our business, which in turn supports our continued investment in our business and the return of cash to our shareholders. Luis will now share some details about our second quarter results. Thank you, Scott. My comments will generally follow the slide presentation. Slide five shows the total company net income bridge for the second quarter compared to last year's second quarter, and breaks down the decrease in adjusted net income. Because this is net income, the figure is noted here on an after-tax basis. Second quarter, 2024 adjusted net income was $9.4 million, or $0.41 per diluted share, versus $12.1 million, or $0.53 per diluted share for the second quarter of last year. The adjusted net income reduction was driven by a higher effective tax rate compared to 2023. We are projecting a higher effective tax rate for 2024 due to the anticipated disallowance of the GILTI deduction and foreign tax credit, resulting from the expected election of bonus depreciation for our Pasadena capital investment. Slide six shows the total company adjusted EBITDA bridge for the second quarter compared to last year's second quarter. Adjusted EBITDA was $47.7 million versus $45.8 million in the prior year, a 4% increase year-over-year. We will cover this in more detail, but to summarize, we delivered adjusted EBITDA growth in Surfactants and Specialty Products, partially offset by global Polymers. Higher corporate expenses reflect the fraud incident mentioned before. Slide seven focuses on the Surfactant segment results. Surfactant net sales were $380 million for the quarter, a 3% decrease versus the prior year. Selling prices were down 8%, primarily due to the pass-through of lower raw material costs, less favorable product mix, and competitive pricing pressures in Latin America. Volume was up 5% year-over-year, driven by double-digit growth in laundry and cleaning, construction and industrial solutions, and oil field end markets. We also delivered double-digit growth with our distribution partners. This was partially offset by lower agricultural demand due to the continued customer and channel inventory destocking. Surfactant adjusted EBITDA for the quarter increased $4 million, or 13% versus the prior year. This increase was primarily driven by the 5% growth in volume and a slight margin improvement. This was partially offset by higher expenses associated with the operational issues at the Millsdale plant and higher pre-operating expenses at our new Pasadena site. Excluding these expenses, adjusted EBITDA grew 47% versus prior year. Now, on slide eight. Polymers net sales were $160 million for the quarter, a 3% decrease versus the prior year. Selling prices decreased 6%, primarily due to the pass-through of lower raw material costs. Volume increased 2% in the quarter, driven by a 2% increase in global rigid polyols demand. Our specialty polyols had an excellent quarter, growing 28% versus prior year. This growth was offset by lower PA volumes. Polymers adjusted EBITDA decreased $2.8 million, or 11% versus the prior year, driven by a non-cash PA write-off of $2.1 million and higher costs incurred at Millsdale due to the operational issues mentioned before. Excluding these special items, adjusted EBITDA grew 8% versus prior year. Finally, Specialty Products net sales were $16.9 million for the quarter, a 29% decrease versus the prior year. Volume was down 2% versus the prior year due to overall lower demand, while Adjusted EBITDA increased $3.6 million, or 69%, primarily due to the higher unit volumes within the MCT product line. Turning to Slide nine. We continue making progress on our cash position. For the first half of 2024, cash from operations was $71 million, or almost double versus the first half of 2023.... Free Cash Flow for the first half of was positive at $11 million, as CapEx investments returned to historical levels. During the first half, we deployed $60 million against CapEx investments and $16.9 million for dividends. During the second quarter, we increased our inventory levels to protect us against the hurricane season and in anticipation of planned shutdowns in the Polymers business. We expect to return to lower inventory levels during the fourth quarter. Now, on slide 10 and 11, Scott will update you on our strategic priorities and capital investments. Thanks, Luis. I will focus my comments on our cost initiatives, business strategy, and the progress of our major capital investments. Our cost reduction program, initiated last year, along with the additional productivity and cost out initiatives underway, centered around improved performance within our supply chain and are expected to deliver $50 million in pre-tax savings in 2024. As of the first half of the year, the company recognized $21 million in pre-tax savings, despite the operational issues in Millsdale that led to $17 million in total expense at the site. These savings were also partially offset by pre-operating expenses of our new Pasadena site, higher operating expenses related to the new low 1,4-dioxane manufacturing process, and overall labor cost inflation. We remain encouraged by the continued volume growth in several of our core end markets during the second quarter. As mentioned earlier, surfactants experienced double-digit volume growth within laundry and cleaning, construction, and industrial solutions, within oilfield, and within our distribution partners. Latin American surfactant volumes grew double digits. Rigid and Specialty Polyols also delivered volume growth that was partially offset by lower phthalic anhydride volumes due to the operational issues mentioned before. Global margins were in line with expectations, despite unfavorable mix. Our customers will always remain at the center of our strategy and innovation. Our long-standing Tier One customers value our technical capacity and the ability to manufacture and deliver quality products at the scale they need. We were pleased with the continued strong second quarter volume growth within our distribution partners around the world. We continue to grow and diversify this important and profitable segment of our surfactant customer base, having added over 800 new customers in the first half of the year. Our technical collaborations are increasingly focused on helping our customers make their product portfolio transition towards a more sustainable future, and we are happy to be on this journey with them. Our diversification strategy in the Tier Two and Tier Three markets and functional products, including agriculture and oil field, continues to be our key priority for Stepan. Insulation remains a critical enabler of a more sustainable and energy-efficient world, and our Polymers business continues to focus on developing the next generation Rigid Polyol technologies that can increase the energy efficiency and cost performance of our customers' insulation products. Moving to slide 11, construction on our new alkoxylation production facility in Pasadena, Texas, is approximately 96% complete, and we expect the plant to start up mid-fourth quarter of this year. The underlying alkoxylation business that supports the Pasadena investment, including alkoxylate sales into the agricultural market, delivered double-digit volume growth during the second quarter and added at attractive unit margins. After completing a three-year capital investment program last year, Stepan now has the largest installed low-1,4-dioxane production capacity, serving the North American merchant market. For the first half of 2024, volumes grew double digits versus prior year and should continue to ramp up throughout the year as more customer and product qualifications are completed. As referenced in our earnings release, Millsdale had higher second quarter expenses of $11.8 million due to operational issues. The Millsdale site continued to advance our water management improvement initiatives, but was impacted by a flooding event, which led to higher expenses than expected for the quarter. In addition to near-term improvements already taken, we have identified longer-term process and infrastructure improvements, which will be part of the normal CapEx program at the site. The plant has been operating with minimal interruptions over the last month. We expect Millsdale expenses related to these operational issues to be substantially lower in the second half as compared to the first half of 2024. Although Millsdale's first half operational challenges and the aforementioned recent Asia fraud event prevented us from delivering significant double-digit adjusted EBITDA growth versus last year, we are encouraged by the volume recovery in our core markets. Excluding what we consider special events, which are the Millsdale disruption, the pre-operating expenses in Pasadena, the agricultural de-stocking, and the fraud incident, adjusted EBITDA in the first half grew more than 35% versus 2023. In closing, we expect second half adjusted EBITDA to improve versus prior year based on continued volume growth and a substantial reduction in second half operational expenses at our Millsdale site, which was the majority of the variance in second quarter expenses. The ongoing recovery in rigid polyols and the expected second half recovery of the agricultural chemicals business should drive improved earnings. Free cash flow should continue to improve versus prior year, driven by the completion of our Pasadena investment, the growth in market volumes, and our continued focus on cost reduction. We believe we are positioned to deliver full-year adjusted EBITDA growth and positive free cash flow. This concludes our prepared remarks. At this time, we would like to turn the call over for questions. Marvin, please review the instructions for the question portion of today's call. Thank you. At this time, we'll conduct the question and answer session. As a reminder, to ask a question, you'll need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Mike Harrison of Seaport Research Partners. Your line is now open. Hi, good morning. Good morning, Mike. Good morning, Mike. Was hoping that you guys could maybe provide a little bit more detail on what you guys are seeing in the agricultural space. It sounds like Latin America maybe showed some recovery, but North America and Europe were below your expectations that you had coming into the quarter. And understand you expect some more recovery in the second half, but maybe just help us understand across those key regions how things are tracking relative to normal. Yeah. So, Mike, spot on. I think in our April call, we said, you know, we expected the destocking in agricultural to continue through the first half of the year with recovery in the second half. That story held true. Unfortunately, in North America and Europe, volumes remained soft, but the real highlight in the second quarter was the restart of the recovery in the Latin American agricultural market. So the Brazilian agricultural market, our volumes were up strong double digits, which was a nice surprise. And, you know, our story and our expectation still holds true. We believe North America and Europe are right behind Latin America in that recovery. Let me add something, Mike. As Scott mentioned, we were expecting destocking to continue here in Q2, and that's exactly what we saw. If you think about the quarter, we saw still destocking in April and May, but then in June, we delivered similar numbers than last year. Looking here into July, we are starting to grow our agricultural business. So actually, the destocking is playing out as we thought, and hopefully, we won't talk about destocking in the future. All right. And then, you know, I was hoping you could give a little bit more color on what happened with the Asia fraud. I think kind of my... You know, other than understanding what was going on, I think what investors would like to know is, you know, is this gonna be fully resolved, and no more charges after we have another $3.5 million impact in Q3, or could there be some additional impacts going forward? And then also, what kind of changes are you guys looking at in your processes to make sure that this doesn't happen again, either in Asia or in another region or subsidiary? Yeah, great question, Mike. You know, as we mentioned in our release, you know, the investigation is ongoing. You know, I think the important message there is we believe that this incident is isolated and contained, and what we have shared at this point is our current evaluation of that isolated and contained event. And I think that's all we can comment at this time. Okay. And then, the last question for me is kind of more on the guidance or outlook front. You said you expect to show year-over-year EBITDA growth in the second half and for the full year. Obviously, we're looking at an unusually weak prior year. So just was wondering if you could provide any further granularity on where you see EBITDA shaking out for the full year. I know the consensus number was previously around $240 million. The prior year was $180 million. You know, do you expect consensus to come down to something more like $220? Is it closer to $200 that makes sense? You know, I think we'd appreciate any additional precision you can provide on the outlook. Sure, Mike. As you know, we don't provide formal guidance, but look at what happened in the first half, right? We delivered, call it $100 million EBITDA in the first half with a lot of one-time events. So if you think about the Millsdale, you know, full first half impact of $70 million, plus the fraud, plus the agricultural destocking, plus the pre-operating expenses, we're spending a lot of money in Pasadena now without any benefits, right? I mean, the site is gonna be up and running in Q4. So that's the 35% EBITDA growth that Scott was mentioning, so call it at $120 million-$125 million. We should be running at $60 million per quarter on an EBITDA basis without these special items. Of course, Q4, you know that we always have some seasonality in Q4. December tends to be low because of people reducing inventory levels and all of that. So, I know you guys will be more careful with the number in Q4, but we should be running at 60+ per quarter. And that's what we need to deliver in the future without these special items and with Pasadena up and running. All right. Very helpful. Thanks very much. Thank you. One moment for our next question. Our next question comes from the line of David Storms of Stonegate. Your line is now open. Good morning. Good morning, Dave. Just wanted to kind of get your thoughts on some of the geographical differences in surfactants. I know you mentioned agricultural, agricultural growth was really strong in Brazil, not as strong in North America. But you also mentioned that laundry and cleaning had a strong growth quarter-over-quarter. Just wondering if you could break out what that growth looked like, volume growth looked like between your geographies? Sure, Dave. Look, we have provided in the remarks a strong growth in laundry and cleaning behind very strong growth in Mexico. So we have acquired new businesses in our Mexico business, and that is driving a lot of this growth. And then when you think about, I mean, we had high single-digit growth in Colombia. We had, you know, very strong growth in Brazil. We had a strong growth in North America in many of the end markets. So we're very pleased with the 5% volume growth in surfactants despite the double-digit agricultural impact because of destocking. So surfactant volumes are pretty strong across the board. Actually, Europe is also growing volumes. A more competitive environment there on pricing, but volumes are growing. Yeah. And, and David, I would just add, you know, as, as we went through 2023 and saw the destocking, that was, was general across all geographies, all end-use markets. The recovery I would characterize as a similar reversal of that. It's not isolated. The only thing that's isolated right now is agricultural, but as you think about, distribution, laundry and cleaning, construction, we're seeing it kind of across the board. Yeah. We're very pleased with the numbers in distribution, because distributors touch thousands of customers, and we're seeing, you know, a strong double-digit growth. And having a strong double-digit growth in a set of, you know, thousands of customers is a good indication that the market is strong. Understood. Very helpful. And then just looking at your taxes, I know you've mentioned that, you're expecting a higher tax impact for 2024. Just trying to put a finger in the wind, is Q2 tax rate kind of a catch-up from Q1 being normalized, or is it reasonable to use, you know, the Q2 tax rate as kind of a run rate for the remainder of the year? Yeah, look, our guidance right now for the year is similar to what we had before, 36% to 38% effective tax rate. It's gonna have some fluctuations by quarter, depends on the discrete items that you have in each quarter. But again, let me remind you guys, 36% to 38% is the P&L rate. We are not gonna pay any... If, if we apply, at the end of the year, the bonus depreciation of the Pasadena assets, actually, on a cash basis, we're not paying any taxes. And we will return next year to the normal, effective tax rate. This is just a P&L, a non-cash, number in the ETR. Use the 36% to 38% guidance that we have. That's very helpful. I'll get back in queue. Thank you. Thank you. One moment for our next question. Again, as a reminder, to ask a question, you'll need to press star one one on your telephone. Our next question comes from the line of David Silver of CL King & Associates. Your line is now open. Good morning. This is Kevin Holder on for David Silver this morning. Hi, good morning. Good morning. Hi. So my first question is related to the Millsdale facility and insurance recoveries regarding the disruptions. So do you guys expect to have any insurance recoveries from, I guess, the flood event and prior disruptions over the next few quarters from the Millsdale facility? No. This is expense that we're taking on a quarterly basis. As we said in the comments, you know, we believe the improvements that we've made to date through the first half of the year give us strong confidence that our expenses in the second half will be substantially lower, but nothing related to insurance. Thank you. That's very helpful. And then, my next question is more, your strategy and goals, in the pre-pandemic period versus the post-pandemic period. So if you could please highlight two or three, like, high-priority goals in the pre-pandemic period, and what your current progress is with those goals, post-pandemic, and, your... in the future, how you plan to achieve those goals, going forward. Are you referring to 2020 as kind of your timeframe, prior to 2020 and then since 2020? Prior to 2020 and then since 2020, yes, please. You know, in terms of our strategy, our strategy, our core strategy really has not changed. You know, it, it remains the continued diversification and acquisition of new customers within the, our Surfactants business, which is all about continuing to diversify and grow in agricultural and oil field and construction and with our Tier Two, Tier Three customers. The impact of the pan- the pandemic had no impact on that strategy whatsoever. And I would say also, as it relates to our Rigid Polyol franchise, energy efficiency driven by building code mandates around the world still remains as strong or even stronger now than it was pre-pandemic. So I don't see any impact from, from our strategy, from, from the pandemic. Awesome. Thank you. That's all for me. I'll hop back in the queue. Thank you. Thank you. Thank you. I'm showing no further questions at this time. I'll now like to turn it back to Scott Behrens for closing remarks. Thank you very much for joining us on today's call. We appreciate your interest and ownership in Stepan Company, and please have a great day. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.