Timothy Fitzgerald
executive
Thank you, and thanks to everyone for joining me this afternoon. As a reminder, some of the statements made during this conference call may be forward-looking. Relevant factors that could cause actual results to differ materially from those forward-looking statements are contained in our earnings release and in our SEC filings, including our most recent Form 10-K.
During this call, we will also discuss the non-GAAP financial measures included in our earnings release. The earnings release, which can be found on our website, includes a reconciliation of the non-GAAP financial measures to the closest comparable GAAP financial measures.
Today, I will be referring to the data that was included in last night's press release. However, our 2025 10-K contains significantly more details on the operations and performance of our company.
Pretax income for the fourth quarter of 2025 was $113 million compared to $134 million for the fourth quarter of 2024. For the full year, pretax income was $561 million in 2025 compared to $584 million for 2024, a decline of only 4%. While we don't normally call out pretax income, it's notable now due to the significantly higher income taxes booked throughout the year, impacting our net income and EPS.
Net income for the fourth quarter of 2025 was $81 million or $8.65 per share compared to net income of $111 million or $11.56 per share for the fourth quarter of 2024. Net income for the full year of 2025 was $419 million or $44.44 per share compared to our net income of $462 million or $48.22 per share for 2024.
One of the primary drivers of the decline in net income was a higher effective tax rate in 2025 compared to 2024. The factors driving the increase in our effective tax rate are outlined in the 10-K.
Petroleum additives sales for the fourth quarter of 2025 were $585 million compared to $626 million for the same period in 2024. Petroleum additives operating profit for the fourth quarter of 2025 was $107 million compared to $136 million for the fourth quarter of 2024, which was a record fourth quarter for the segment.
The decrease in operating profit compared to prior year was driven by a decline in shipments of 6%, mainly due to market softness as well as a decline in selling prices. In addition, to manage inventory levels, operating profit in the fourth quarter was impacted by higher unit costs resulting from lower production volumes at our plants.
For the full year of 2025, sales for the Petroleum Additives segment were $2.5 billion compared to $2.6 billion for 2024. Petroleum additives operating profit for 2025 was $520 million compared to $592 million in 2024. The drivers for the decrease in operating profit were consistent with those affecting the fourth quarter comparison.
Shipments were down by 4.9% compared to last year as we saw market softness throughout 2025, combined with our strategic decision to manage the profitability of our portfolio by reducing low-margin business. We are very pleased with the performance of our petroleum additives business in 2025 compared to our record performance in 2024. However, we remain challenged by the ongoing inflationary environment and the impact of tariffs as well as softness in the market impacting shipments. We continue to focus on investing in technology to meet customer needs, becoming more efficient in our operating costs, optimizing our inventory levels and improving our portfolio profitability.
We report the financial results of our AMPAC business and our newly acquired Calca Solutions business in our Specialty Materials segment. Specialty Materials sales for the fourth quarter of 2025 were $49 million compared to $27 million for the same period in 2024. The increase in sales was mainly due to higher volume at AMPAC and the inclusion of the Calca business, which was acquired on October 1, 2025. Specialty Materials operating profit for the fourth quarter of 2025 was $7 million compared to about $2 million for the fourth quarter of 2024.
As previously stated, we will see substantial variation in quarterly results for the Specialty Materials segment on an ongoing basis due to the nature of the business. For the full year of 2025, sales for the Specialty Materials segment were $182 million compared to $141 million for 2024. Specialty Materials operating profit for 2025 was $47 million compared to $17 million for 2024.
The increase in operating profit was mainly driven by an increase in volume demand at AMPAC. As previously announced, through our acquisitions of AMPAC and Calca and our investments to expand capacity at both operations, we have committed approximately $1 billion to this resilient high-technology Specialty Materials segment.
Our company generated solid cash flows throughout the year in 2025, which allowed us to return $183 million to our shareholders through share repurchases of $77 million and dividends of $106 million. We also reduced our total debt by $88 million compared to 2024, which includes the borrowing for the Calca acquisition.
As of December 31, 2025, our net debt-to-EBITDA ratio was 1.1x, slightly down from 1.2x at the end of 2024. This strong cash flow performance enables us to continue to provide value to our shareholders through reinvestment of capital into our businesses for growth and efficiency, acquisitions, share repurchases and dividends. We anticipate continued strength in our Petroleum additives and Specialty Materials segments. We are committed to making decisions that promote long-term value for our shareholders and customers while staying focused on our long-term objectives.
We believe that the core principles guiding our business, a long-term perspective, a safety-first culture, customer-focused solutions, technology-driven products and a world-class supply chain will continue to benefit all of our stakeholders. That concludes our planned comments. We are available for questions via e-mail or by phone, so please feel free to contact me directly. Thank you all again, and we will talk to you next quarter.
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