Good morning and welcome to the Stepan Company first quarter 2025 earnings conference call. During Good morning and welcome to the Stepan Company first quarter 2025 earnings conference call. During the presentation, all participants will be in a listen-only mode. Afterward, we will conduct a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. As a reminder, this call is being recorded on Tuesday, April 29th, 2025. It is now my pleasure to turn the call over to Mr. Sam Hinrichsen, Vice President and Interim Chief Financial Officer of Stepan Company. Mr. Hinrichsen, please go ahead. Good morning, and thank you for joining Stepan Company's first quarter 2025 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 detailed in our Securities and Exchange Commission filings. In addition, this conference call will include discussions 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 make these slides available at approximately the same time as when the earnings release is issued, and we hope that you find the information and perspectives helpful. With that, I would like to turn the call over to Mr. Luis Rojo, our President and Chief Executive Officer. Thank you, Sam. Good morning, and thank you all for joining us today to discuss our first quarter 2025 results. I plan to share highlights of the quarterly performance and will also share updates on our key strategic priorities, while Sam will provide additional details on our financial results. We are pleased with the start of 2025, and I'm proud of our team that is committed to further improving earnings going forward. The company reported first quarter adjusted EBITDA of $57.5 million, up 12% versus the prior year. Surfactant and specialty products delivered double-digit adjusted EBITDA growth, while polymers adjusted EBITDA decreased slightly year over year. Volume grew 4%, and the growth was broad-based with surfactants up 3%, polymers up 7%, and our MCT product line up 4%. We continue to experience double-digit volume growth within the agricultural and oil field markets and with our distribution partners in surfactants. North America and European rigid polyol volume grew single digits, while the specialty polyols and commodity PA businesses delivered strong growth year over year. We believe that rigid polyol growth in North America and Europe continues to be restrained by global macroeconomic uncertainties and the high interest rate environment, while encouraged by the broad-based volume growth across several of our key strategic markets. We finished the first quarter of 2025 with $19.3 million of adjusted net income, up 32% versus the prior year, driven by earnings growth in surfactants and specialty products and a lower tax rate. We executed the safe start-up of our new Pasadena, Texas, site, which is now operational. During the first quarter of 2025, the company paid $8.7 million in dividends to shareholders. Our board of directors declared a quarterly cash dividend on Stepan common stock of $0.38 per share, payable on June 13, 2025. Stepan has paid and increased its dividend for 57 consecutive years. Sam will now share some details about our first quarter results. Thank you, Luis. My comments will generally follow the slide presentation. Let's start with slide four to recap the quarter. First quarter 2025, adjusted net income was $19.3 million, or $0.84 per diluted share, versus $14.7 million, or $0.64 per diluted share for the first quarter of last year, a 32% increase. The increase was driven by broad-based volume growth, higher margins in surfactants, and a lower tax rate. Adjusted EBITDA for the quarter was $57.5 million, up 12% year over year, driven by volume growth and improved surfactant product and customer mix, which was partially offset by higher pre-operating expenses at our Pasadena, Texas site. Cash from operations was $6.9 million for the quarter, and free cash flow was negative at $25.8 million. Slide five shows the total company net income bridge for the first quarter of 2025 compared to last year's first quarter and breaks down the increase in adjusted net income. Because this is net income, the figures are noted on an after-tax basis. We will cover each segment in more detail, but to summarize, we delivered operating income growth in surfactants and specialty products, partially offset by lower operating results in polymers. The first quarter results benefited from a lower effective tax rate. The effective tax rate was 20% versus our normal range of 24%-26%. This decrease was primarily attributable to favorable discrete items associated with the tax audit settlement in the U.S. Slide six shows the total company adjusted EBITDA bridge for the first quarter compared to last year's first quarter. Adjusted EBITDA was $57.5 million versus $51.2 million in the prior year, a 12% increase. We will cover each segment in more detail, but to summarize, we delivered adjusted EBITDA growth in surfactants and specialty products, partially offset by global polymers. Adjusted EBITDA results also benefited from lower corporate expenses compared to prior years. Slide seven focuses on the surfactant segment results. Surfactant net sales were $430.3 million for the quarter, a 10% increase versus the prior year. Selling prices were up 12%, primarily due to the improved product and customer mix and the pass-through of higher raw material costs. Sales volume grew 3% year over year, mainly due to double-digit growth within the agricultural and oilf ield end markets, along with our distribution partners. This growth was partially offset by lower demand within the commodity consumer product end markets. Foreign currency translation negatively impacted net sales by 5%. Surfactant adjusted EBITDA increased $4.5 million, or 10% versus the prior year. This increase was primarily driven by the 3% growth in sales volume and improved product and customer mix, which was partially offset by pre-operating expenses at our Pasadena, Texas site. Now, on slide eight, polymer net sales were $146.1 million for the quarter, flat versus the prior year. Selling prices decreased 7%, primarily due to the pass-through of lower raw material costs and competitive pressures. Sales volume increased 7% in the quarter. North American and European rigid polyol volume grew low single digits despite the continued challenging overall environment. Specialty polyols and commodity phthalic anhydride volume delivered strong growth year over year. China Polymers volume was up low single digits. Foreign currency translation had a nominal impact on net sales during the quarter. Polymer adjusted EBITDA decreased $0.3 million, or 2% versus the prior year, primarily due to less favorable product mix and a high-cost inventory carryover, which was partially offset by the 7% volume growth. Finally, specialty product net sales were $16.8 million for the quarter, an 11% increase versus the prior year, primarily due to higher selling prices. Specialty product adjusted EBITDA increased $1.2 million, or 21%. The increase in adjusted EBITDA was primarily due to margin recovery and volume growth within the medium-chain triglycerides product line. Next, on slide nine, free cash flow was negative at $25.8 million for the first quarter, down $37.2 million year over year, reflecting typically higher working capital requirements during the first quarter, as well as increased purchases of raw materials in anticipation of tariffs and to support business growth. We are cautiously optimistic in our ability to deliver positive free cash flow for the full year 2025. During the first quarter, we deployed $32.7 million against capital investments and $8.7 million for dividends. Now, on slide 10 and 11, Luis will update you on our strategic priorities. Thanks, Sam. I will focus my comment on our strategic priorities. Our customer will always remain at the center of our strategy and innovation efforts. Our Tier 1 customer base remains a solid foundation of our business. Continuing our new customer acquisition with Tier 2 and Tier 3 customers remains a key priority. This is an important and profitable growth channel within our surfactant business. For the first quarter of 2025, our volume grew mid-single digits year over year, and we added over 400 new customers. Our end market diversification strategy remains a key focus area. For the first quarter, we grew double digits in our agricultural and oil field businesses. We are pleased to see our North America and European rigid polyol business return to year-over-year growth after a challenging 2023 and 2024. Insulation remains a critical enabler of a more sustainable and energy-efficient world, and we are confident in the long-term growth prospects of this business. Our focus continues to be on developing the next generation rigid polyol technologies that can increase the energy efficiency and cost performance of our customer insulation products. Additionally, we are excited about the new products we are introducing in the growing spray foam end market. Within polymers, we were able to achieve strong growth in our specialty polyol and our commodity PA business. This will enable us to deliver earnings growth in 2025. Our supply chain operation and resiliency continues to improve, and we delivered a solid quarter in all our key operational metrics. We will continue to make the necessary investments in our Mills dale site to ensure reliable operations both today and in the future. Moving to slide 11, we safely start up our new Pasadena, Texas site. We have made six different products to date. We expect to achieve the full contribution rate of the plant during the second half of 2025. Our commercial teams continue to develop and deliver new specialty ethoxylation opportunities. Specialty ethoxylation volume grew a strong double digits in the first quarter. To conclude, we remain focused on accelerating our business strategy through improved execution to grow volume, improve product and customer mix, and accelerate free cash flow generation. We believe surfactants will experience continued growth in our key strategic markets and that polymer demand will continue improving as we get more market certainty and we execute our innovation and growth plans. In addition, our Pasadena facility is now operational, and as previously communicated, we believe this will enable us to deliver volume growth and supply chain savings during the second half of the year. Despite all the current market uncertainties, including the impact of tariffs, we remain cautiously optimistic that we will deliver full-year adjusted EBITDA and adjusted net income growth and positive free cash flow in 2025. This concludes our prepared remarks. At this point, we would like to turn the call over for questions. Steven, please review the instructions for the questions portion of today's call. Thank you. At this time, we will conduct the question-and-answer session. As a reminder, to ask a question, you will 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. Congratulations on the Pasadena ethoxylation start-up. I was hoping that maybe you could answer a few questions about that facility and kind of the timing of how we should think about the contribution there. First of all, you said it, I believe you said it was producing six products. Is that kind of the limit, or are there still some products that you're bringing online? Can you talk at all about how we should think about the utilization and customer qualification ramp-up process? Is that something that gets wrapped up in the next few months, or is that something that's continuing kind of through the end of the year? Great question, Mike. We are very excited with the news and with Pasadena starting up. Only six products. We have shared in the past that we're planning to produce more than 60 products in Pasadena. We are in the process of qualifying one by one. This is going to take a few months, okay? That is why we're saying the full contribution starting more in the second half of the year and, of course, a full, full contribution from the plant in 2026. As we have talked in the past, we expect to fill up the plant pretty quick in a few quarters, right, because we have a lot of the volumes already. Of course, we want to continue growing, and if we can keep some of that volume in the site for growth that is coming and keeping the other supply chain options that we have available, that will be even better for us. We will see how the next few quarters develop. As I said in my prepared remarks, specialty ethoxylates are growing a strong double digits, and to give you the exact number, it is 19% growth in Q1. Very, very strong growth. It is early days, and we still spend $4 million in Q1 in pre-operating expenses in Pasadena. That is why if you exclude that, we are above the $60 million EBITDA. That is something, of course, that we will mitigate with the supply chain savings going forward in future quarters. I appreciate that color. That's helpful. In terms of how we should think about the earnings contribution, at least directionally, it sounds like maybe in Q1 it was maybe $3 million or $4 million to the negative in operating income or EBITDA. Should we assume that Q2 is still negative but better than that, and then it's Q3 and Q4 when we start to see the positive earnings contribution ramp up? Yeah, I think you are thinking that directionally the right way. I think Q2 is still, again, we are just starting off, so we are still investing, and you are not going to see the help in Q2, but for sure, you are not going to see such a negative like in Q1. Perfect. Moving on to a couple of other questions that I had. One of them in surfactants, you mentioned the weakness in the commodity consumer products portions of the business. I'm just curious how much of that decline is intentional shifting of business into higher margin and non-commodity product lines and kind of higher value applications? Can you just help us understand what else is contributing to the decline in volumes in that commodity consumer piece? Yeah, look, I mean, we are not intentionally moving volume from consumer products to other applications, but of course, I mean, we will always optimize our assets in the future if we have to. We have really a sluggish demand from several of our consumer product customers. And if you see, if you read the reports from others, volumes are not growing. That's the challenging situation with inflation, with everything that the consumer is experiencing. We are not seeing material volume growth in this segment as we expect. All right. The last one for me is on the polymers business. You mentioned that that high-cost inventory that's still flowing through the P&L was a drag on margin. Are most of those higher-cost goods out of inventory right now, or is there still more that needs to flow through? I guess my other question on polymers is, when might we expect to see pricing stabilize? I believe it was still a negative 7% year over year in the first quarter. Great question, Mike. The main issue in polymers in Q1 was the higher inventory cost that we were carrying on, and we are getting out of that. We are getting out of that already in Q2. Margins should improve. Is pricing stabilizing? Yeah. I think, again, when you think about pricing and raw materials, we should see improvements. All right. Thanks very much. Thank you. Our next question comes from the line of Dave Storms of Stonegate. Your line is now open. Good morning. Just hoping we could start with. Good morning, Dave. Maybe morning. Hoping we could start with maybe what you're seeing in down channel inventory levels, the volume increase that you saw this quarter. Was there any sense that this is from maybe a pull-forward in inventory levels as customers are trying to get ahead of some of the macro uncertainties? Great question, Dave. Look, we had a good quarter in Q1 in volumes, right? I mean, when you think about 3% in surfactants, 7% in polymers, 4% in MCT, we're very pleased. We don't believe there is any overstocking in Q1 with the volumes that we shipped. Actually, we have talked a lot about our customers, especially on the polymer side, to see if there is any potential inventory build-up. We are not getting that perspective as of now. I will complement your question with we also are seeing the same dynamics in April, right? I mean, similar dynamics in the surfactant business, very strong Ag, very good oil field, good distribution. Same dynamics in surfactants. Actually, we're seeing an acceleration of growth in the polymers business. We need to see how that plays out in May, June, and Q3, and if there is any pre-build in inventory because of tariffs or price increase concerns or something like that. Yeah, April is coming stronger on the polymer side, and that's the piece that we need to evaluate in the next few months. Understood. Very helpful. Thank you. You mentioned a couple of times just the improved customer mix. I'm assuming this is referring to sort of more tier two and three customers. Are you able to give us a sense of maybe of those tier two and three customers, which are more spot buyers and maybe which maybe are a little stickier using some of the additional services that you can provide for the tier two and three customers? Sure. The mix is coming from both. It's coming from tier two, tier three, and it's also coming from the end market diversification. Ag is growing very, very strong. Oil field is growing very nicely. All of those are positive mix in our surfactant business. Actually, when you think about it, you all can see the public data. Oleochemicals went up significantly in Q1. That was a drag in our margins in surfactants because oleochemicals went up, and you always have a gap between raw material price increases and then how much you can pass through and how fast you can pass through some of that increases. There is always a lag. We are very pleased with the results in surfactants driven by the customer and the product mix. Understood. Thank you for taking my questions. I'll get back in Q. Thank you. Thank you, Dave. Our next question. One moment, please. Our next question comes from the line of David Silver of CL King & Associates. Your line is now open. Yeah. Hi. Good morning. Thank you. Good morning, David. Good morning. Yeah. Good morning. A couple of questions, maybe a follow-up on kind of your double-digit sales growth in agricultural and oil field surfactants. This would just go back to maybe the question about potential, I don't know, pipeline filling or overstocking. You did note double-digit growth. Firstly, I just was trying to confirm that the bulk of the demand growth was on the agricultural side as opposed to oil field. Secondly, I guess in the past couple of years, there was a big run-up in volumes on the agricultural surfactant side, and then there was a period of time, I guess, for inventories to normalize. I'm just thinking in the current environment, it is the run-up to the spring planting season. There are some tariff issues. I mean, just on the agricultural side, what is your thoughts, your best thoughts about the level of any pre-buying or pipeline filling that may not be sustainable, I guess, as the balance of the year goes on? Thank you. David, you are 100% right that the majority of the growth is driven by our ag business instead of oil field. I mean, oil field is a strong growth, but ag was significantly higher. Of course, we have a bigger business in ag than in oil field. We keep talking with our customers, and we do not believe there is plenty of ag inventory increases. If you think about where people are with interest rates, nobody is willing to put a lot of inventory and tie a lot of cash like what happened in 2022, where it was totally a different environment with supply chain issues across the board. Everybody wanted to have the material, and interest rates were not where they are today. All the data that we have from our customer is there is no significant inventory built up anywhere that we know, and we continue seeing good orders for April and actually already a good book order for May on the ag business. Okay. Very good. Thank you for that. I did have a question, follow-up maybe on your comments on the polymer side this quarter. I think you did speak to some of the inventory issues that may have impacted your margins. I was hoping, not sure if you commented on this, but in the slide deck, you did cite a less favorable product mix. I am just wondering if you could comment on that. Is that particular end markets? Is that a particular region? Just the less favorable product mix that maybe impacted your margin performance this quarter, and what is the outlook for that for the balance of the year? Thank you. Yeah. Good point, David. The issues are following. We were very clear. We grew single digits. Our rigid polyol business, right, North America and Europe combined, low single digits. We grew very strong double digits in our phthalic anhydride, our PA business. Of course, phthalic anhydride is a commodity. It has lower margins, and we are capturing a lot of new business and new share in that end market because of other competitive dynamics. That is what is driving the mix impact in the polymers business. That will continue because we continue growing in our PA business. I mean, the issue in Q1 was the high inventory cost that we had across the polymers business that really dragged the margins. That is why we had basically flattish EBITDA with volumes of 7%. That was the main drag. Okay. Great. Thanks for that. Next question would probably be a two-parter, but the topic would be tariff impacts as you see them currently. I do think you're largely a local-for-local kind of structure right now, certainly in the U.S. and Europe maybe. I am wondering if you could comment on how the tariff situation as it currently stands, which I recognize is uncertain. Are there any kind of pressure points maybe in your Mexican production base in particular? Is all of that product covered by the USMCA agreement, or might some of it be sold into the U.S. and be subject to some of the tariffs that have recently been announced? Admittedly unsettled. Where would you kind of characterize your greatest sensitivity, direct impact from potential tariff policies? Sure. Of course, the question of the week and the month, right? Look, as you said, David, things are changing every day. This is a very volatile and uncertain dynamic that we all have to navigate through right now. As you clearly said, the majority of our business is sourced, produced, and sold within the regions, right? The majority of our volumes are in each of the regions that we compete. Of course, there are still impacts on the tariff because we import raw materials, and there is going to be always some impact that we are working right now to mitigate through changes on our sourcing strategy where possible and where it makes sense, and also pricing. We all know tariffs are inflationary. I believe many customers and many competitors will price for tariff. We're working on that right now because our objective will be to recover any impact. When you think about Mexico and Canada, our products are included in the USMCA. We're good. We're good with Mexico and Canada. We still have other things that we need to recover via pricing and via supply chain changes. Okay. Last one for me, maybe a question about the indirect effects that you've seen thus far from the tariff announcements or potential import tariff implementation. This would have to do maybe with your R&D or your product development efforts where you're collaborating with customers, and their tariff exposures may be a little bit different than Stepan, than your company's. Have you noted or can you speak to any pausing or any changes in the collaborative relationships, let's say, on new product developments that might be commercialized over the next year or two as a result of the tariffs? In other words, has anything changed with your R&D or technical collaborations with customers, let's say, since the beginning of the year or since April 2 with the tariff announcements? Kind of indirect effects on your customers from tariff issues that might be impacting your collaborative work with them. That would be my question. Thank you. Look, we will continue our collaborative work with our customer. We have a customer intimacy strategy, and our innovation, I call it customer-centric innovation because, again, we are co-developing things with them. We want to make sure that we're working on projects that they need, they want, and they aspire to launch. It's working with their objectives and their plans. I wouldn't say we have seen a significant change in the last few days with the tariff announcement, but we will stay diligent, and we will continue working with our customers to make sure that we are providing the service and we're helping them in all their formulation challenges and where things need to be changed based on the tariff situation. Okay. No reduction in their willingness to work with Stepan, I guess, is what you're saying? I'm saying we will continue working with our customers in all their innovation challenges and changes that they need to execute. I'm sure more requests are going to come in the future when this tariff situation also settles. I think people are also hesitant to make a lot of changes when the news are changing every day. Right. Okay. Great. Thanks very much. I appreciate all the color. Thank you, David. Our next question comes from the line of Dmitry Silversteyn of Water Tower Research. Your line is now open. Thank you very much. Thank you, gentlemen, for taking my call, and congratulations on a strong start to the year. A couple of questions. They are related, I think. Let's start with the raw material situation here. You've seen an increase in pricing on raw material pass-through in your surfactants business and a decline in pricing on raw material pass-through in the polymer business. What specific or at least families of raw materials are still inflating in the surfactants and are deflating in your polymer business? Excluding the pass-throughs, what does the pricing environment look like in these businesses? Look, as I mentioned before, in surfactants, we saw important increases on oleochemicals, and that was the driver of pricing actions at the end of the quarter and actually early into April to recover some of that. In polymers, again, we made some decisions in Q1, and we still have the raw material that we had on our inventory. We know we have to flow through that for a few months, for a couple of months. I think we are in a good environment in terms of pricing and margins. I think it's a healthy situation, and we will need to continue working with how tariff or any other development on the raw material piece can impact us in the following months because, again, tariffs are going to have direct and are going to have indirect impacts, right? That's why we need to stay diligent, and we need to monitor the situation and take pricing where it's needed. Okay. I understand that. I guess my question had more to do with the raw material cycle. Where are we or where you are in the raw material cycle? In other words, have raw materials stopped increasing, for example, in surfactants, and you're just catching up with the pass-throughs? Have they stopped declining or continued to decline in polymers so we can expect to see some more pricing pressure there? Yeah. They have stabilized. Again, tariffs are coming, so things will keep changing in the next few months. Things stabilize versus what we saw at the beginning of Q1, but now we will have a new development in the next few months that we need to monitor. Understood. Just to come back to the tariffs really briefly, you talked about direct and indirect impact, right? The direct impact would be if you have some raw material cost increases, and then indirect impact would be if your end products or your customers' end products are being impacted in terms of demand by reciprocal tariffs going back and forth. Is there one area that you're more concerned or have better visibility than another, or are you monitoring both, and you expect both of them to be somewhat impactful depending on how the situation actually comes out? Yeah. No, look, we need to monitor the indirect piece, and we do not have enough data yet because things have not been executed to the full extent. Yeah, I mean, if there is a huge wave of inflation, you could argue that could have some demand impact in the construction industry, the consumer, right, on surfactants. That is what we need to monitor in the next few months. We have not seen anything. As I said before, we have a—I mean, we have a storm in April. This will take a few more months to go through the whole chain all the way to the consumer, all the way to the construction industry for our polymers business. We will provide more updates in July. Understood. Final question, just on sort of base-level demand. You've seen strong demand in oil field chemicals and in consumer. You also mentioned that your insulation products are growing well in North America and Europe, and you're rolling out your spray foam products. Construction seems to be—I don't want to say starting to grow, but at least a little bit more uniform indications that the market is stabilizing, certainly here in North America and maybe beginning to turn the corner. How do you feel about the construction side of your business, and what do you expect to see in 2025? No, the comments that we made was we had single-digit growth in our rigid polyol business in North America and Europe, and that we believe there is still constrained demand because of the uncertainties in the market, because of the high interest rate environment. We believe there is a lot of pent-up demand in this industry and this end market, and we haven't seen the full potential of it. Hopefully, with more certainty and lower interest rates in the future, that's where we will see this business growing faster like it did in the last—if you think about the last 10 to 20 years, this business grew high single digits. The markets grew high single digits, and we are not seeing the markets growing high single digits now. That will take some time to go back to those levels. Okay. It is improving, excuse me. The demand level you're seeing in the first quarter, is it better than what you saw in 2024 and 2023? Yeah. Yeah. We grew 7% volumes in polymers, and we grew single digits in rigid polyol. Okay. Okay. The business is growing, but there's still more growth to come, assuming the interest rate environment and the economic environment improves. Understood. Thank you. Thank you, Dmitry. Thank you. 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. We will welcome back Mike Harrison for our next question from Seaport Research Partners. Your line is now open. Hi. Just a couple more for me. I know you've addressed a lot of questions on tariffs. My question relates to imports of competitor products. I believe in the past, you guys, maybe particularly in the rigid polyol side, you've talked about some competition from imports in the U.S. And I believe this has also come up in the context of the medium-chain triglycerides business within your specialty business. Based on what you're seeing with the tariffs right now, are you expecting that maybe some import competition could decline because of the impact of tariffs in any of your three segments? Great question, Mike. Not in polymers. The polymers business is heavily sourced also on competition within the region. You are 100% right that our MCT business has imported competition, and we are evaluating options. To some degree, the surfactant business as well. I mean, we always see some levels of surfactants imports from China, especially in the West Coast. These are not significant volumes, but there is always some imported products in the surfactant business that for sure we will evaluate and try to grow our business and grow our shares. All right. Very helpful. Last question for me is on the distribution piece of the surfactants business and the growth that you're seeing there. Is that just underlying market growth? Are you seeing some broader shifts away from a direct-to-customer and more volume just naturally moving through distributors? Or is this part of a more concerted effort on your part to expand distribution relationships or partnerships? If that is the case, is that a North America thing? Is it a global thing? What color can you provide on that? Thank you. Look, we are continuing working on our tier two, tier three strategy globally. I wouldn't say this is a North America-only focus. I mean, it's a focus area for all our regions in our surfactant business. Of course, North America continues to be the biggest region. What I would say is that you have both. You have market growth, and you have our ongoing efforts to capture share, to capture more customers. I mentioned that we acquire more than 400 new customers in this space. It's part of our core strategy, and we continue developing this business, and it continues to pay out. All right. Thanks very much. Thank you, Mike. Thank you. I am showing no further questions at this time. I would now like to turn it back to Sam Hinrichsen for closing remarks. Thank you very much for joining us on today's call. We appreciate your interest and ownership in Stepan Company. Have a great day. Okay. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.