Koppers Reports Fourth Quarter and Full-Year 2024 Results; Provides 2025 Outlook

About this update from Koppers Holdings Inc.

Fourth-Quarter Sales of $477.0 Million vs. $513.2 Million in Prior Year Quarter Full-Year Sales of $2.09 Billion vs. $2.15 Billion in Prior Year PITTSBURGH , Feb. 27, 2025 /PRNewswire/ -- Koppers Holdings Inc. (NYSE: KOP), an integrated global provider of treated wood products, wood treatment chemicals, and carbon compounds, today reported net loss attributable to Koppers for the fourth quarter of 2024 of $10.2 million , or $0.50 per diluted share, compared to net income attributable to Koppers for the fourth quarter of 2023 of $12.9 million , or $0.59 per diluted share. Adjusted net income attributable to Koppers and adjusted earnings per share (EPS) were $16.0 million , or $0.77 per share for the fourth quarter of 2024, compared to $14.5 million , or $0.67 per share in the prior year quarter. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for the fourth quarter of 2024 were $55.2 million , compared with $53.9 million in the prior year quarter. Consolidated sales of $477.0 million decreased by $36.2 million , or 7.1 percent, compared with $513.2 million in the prior year quarter. The Railroad and Utility Products and Services (RUPS) business reported lower sales and profitability primarily as a result of lower volumes for Class I crossties and higher costs, despite fourth-quarter records in operating profit and adjusted EBITDA achieved by the domestic utility pole business. The Performance Chemicals (PC) segment had decreased sales and slightly lower profitability primarily driven by lower volumes of preservatives and higher raw material costs; however, the segment saw improved margin due to cost savings initiatives. The Carbon Materials and Chemicals (CMC) segment experienced a sales decline primarily driven by decreased prices across most products, while profitability increased due to lower raw material and overhead costs, as well as a bad debt reserve in the prior year period. Chief Executive Officer Leroy Ball said, "While 2024 results fell short of our expectations for performance, I am proud of the many accomplishments of Koppers team members worldwide that enabled us to make continued progress on our journey of creating the foundation for a connected world through our diverse portfolio of leading products and services.  Record safety performance, continued advancements in sustainability, and financial performance in the final three quarters of the year that exceeded prior year in several key metrics are all highlights to build upon in 2025.   While a pullback in sales activity in the last six weeks of the year in all segments proved to be too much to overcome, the cost actions we began taking in the fourth quarter are setting us up nicely to weather the uncertainty ahead that's brought on by the unpredictable economic and policy environment." Fourth Quarter Financial Performance 2024 Financial Performance 2025 Outlook After considering the current competitive environment, global economic conditions, as well as the ongoing uncertainty associated with geopolitical and supply chain challenges, Koppers expects 2025 sales of approximately $2.17 billion , compared with $2.09 billion in 2024. Adjusted EBITDA is anticipated to be approximately $280 million in 2025, compared with $261.6 million in 2024. The effective tax rate for adjusted net income attributable to Koppers in 2025 is projected to be approximately 28 percent, consistent with the adjusted tax rate of 26 percent in 2024.  Accordingly, 2025 adjusted EPS is forecasted to be $4.75 per share, compared with $4.11 per share in 2024. Koppers expects operating cash flow of approximately $150 million in 2025, compared with operating cash flow of $119.4 million in 2024, including any impact from planned pension terminations and other special items. The company completed the termination of its largest U.S. qualified pension plan in February 2025 , which required additional funding of $1.6 million in 2024 and $13.9 million in 2025. Koppers anticipates capital expenditures of approximately $65 million in 2025, with approximately $9 million allocated to discretionary growth projects, compared with $77.4 million in 2024.  The capital expenditure amounts include capitalized interest. Commenting on the forecast, Mr. Ball said, "Our forecast for this year is our attempt at valuing what we know today with our best guess of how the next ten months will unfold in what is currently an extremely chaotic environment.  Tariffs and their follow-on impacts could potentially benefit or hurt Koppers profitability on the scale of tens of millions of dollars to the extent they go unmitigated.  Fortunately, we have several options to mitigate at least a good portion of the potential negative impact and have not baked any potential indirect positive benefits into our forecast.  Because of the heightened level of uncertainty that surrounds the economy in general, we are doubling down on bringing cost and efficiency benefits to realization as quickly as possible in order to buffer the unpredictability of the markets and create an organization transformed and aligned to higher performance. "We have completed the heavy investment period of our growth strategy and are now poised to maximize the value of those investments in the form of increased earnings and free cash flow.  As a result, we will primarily direct that cash to reducing our debt and repurchasing shares as they remain undervalued, which will both be additive to earnings per share." Koppers does not provide reconciliations of guidance for adjusted EBITDA and adjusted EPS to comparable GAAP measures, in reliance on the unreasonable efforts exception.  Koppers is unable, without unreasonable efforts, to forecast certain items required to develop meaningful comparable GAAP financial measures. These items include, but are not limited to, restructuring and impairment charges, acquisition-related costs, mark-to-market commodity hedging, and LIFO adjustments that are difficult to forecast for a GAAP estimate and may be significant. Forward-looking statements, including the guidance above, are based upon current expectations and are subject to factors that could cause actual results to differ materially from those set forth below. Please see "Safe Harbor Statement" below for more information. Investor Conference Call and Webcast Koppers management will conduct a conference call this morning, beginning at 11:00 a.m. Eastern Time to discuss the company's results for the fourth quarter and full year 2024. Presentation materials will be available at least 15 minutes before the call on www.koppers.com  in the Investor Relations section of the company's website. Interested parties may access the live audio broadcast toll free by dialing 833-366-1128 in the United States and Canada , or 412-902-6774 for international, Conference ID number 10196723. Participants are requested to access the call at least five minutes before the scheduled start time to complete a brief registration.  The conference call will be broadcast live on  www.koppers.com  and can also be accessed here . An audio replay will be available approximately two hours after the completion of the call at 877-344-7529 for U.S. toll free, 855-669-9658 for Canada toll free, or 412-317-0088 for international, using replay access code 5314690. The recording will be available for replay through May 27, 2025 . About Koppers Koppers (NYSE: KOP) is an integrated global provider of essential treated wood products, wood preservation technologies and carbon compounds. Our team of 2,100 employees create, protect and preserve key elements of our global infrastructure – including railroad crossties, utility poles, outdoor wooden structures, and production feedstocks for steel, aluminum and construction materials, among others – applying decades of industry-leading expertise while constantly innovating to anticipate the needs of tomorrow. Together we are providing safe and sustainable solutions to enable rail transportation, keep power flowing, and create spaces of enjoyment for people everywhere. Protecting What Matters, Preserving The Future. Learn more at Koppers.com . Inquiries from the media should be directed to Ms. Jessica Franklin Black at [email protected]  or 412-227-2025. Inquiries from the investment community should be directed to Ms. Quynh McGuire at [email protected] or 412-227-2049. Non-GAAP Financial Measures This press release contains certain non-GAAP financial measures. Koppers believes that adjusted EBITDA, adjusted net income attributable to Koppers, and adjusted earnings per share provide information useful to investors in understanding the underlying operational performance of the company, its business and performance trends, and facilitate comparisons between periods. The exclusion of certain items permits evaluation and a comparison between periods of results for ongoing business operations, and it is on this basis that Koppers management internally assesses the company's performance. In addition, the Board of Directors and executive management team use adjusted EBITDA as a performance measure under the company's annual incentive plans and for certain performance share units granted to management. Although Koppers believes that these non-GAAP financial measures enhance investors' understanding of its business and performance, these non-GAAP financial measures should not be considered an alternative to GAAP basis financial measures and should be read in conjunction with the relevant GAAP financial measure. Other companies in a similar industry may define or calculate these measures differently than the company, limiting their usefulness as comparative measures. Because of these limitations, these non-GAAP financial measures should not be considered in isolation or as substitutes for performance measures calculated in accordance with GAAP. See the attached tables for the following reconciliations of non-GAAP financial measures included in this press release: Unaudited Reconciliation of Net Income to Adjusted EBITDA and Unaudited Reconciliations of Net Income Attributable to Koppers to Adjusted Net Income Attributable to Koppers and Diluted Earnings Per Share and Adjusted Earnings Per Share. Safe Harbor Statement Certain statements in this press release are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and may include, but are not limited to, statements about sales levels, acquisitions, restructuring, declines in the value of Koppers assets and the effect of any resulting impairment charges, profitability and anticipated expenses and cash outflows. All forward-looking statements involve risks and uncertainties. All statements contained herein that are not clearly historical in nature are forward-looking, and words such as "outlook," "guidance," "forecast," "believe," "anticipate," "expect," "estimate," "may," "will," "should," "continue," "plan," "potential," "intend," "likely," or other similar words or phrases are generally intended to identify forward-looking statements. Any forward-looking statement contained herein, in other press releases, written statements or other documents filed with the Securities and Exchange Commission, or in Koppers communications and discussions with investors and analysts in the normal course of business through meetings, phone calls and conference calls, regarding future dividends, expectations with respect to sales, earnings, cash flows, operating efficiencies, restructurings, cost reduction efforts, the benefits of acquisitions, divestitures, joint ventures or other matters as well as financings and debt reduction, are subject to known and unknown risks, uncertainties and contingencies. Many of these risks, uncertainties and contingencies are beyond our control, and may cause actual results, performance or achievements to differ materially from anticipated results, performance or achievements. Factors that might affect such forward-looking statements include, among other things, availability of and fluctuations in the prices of key raw materials, including coal tar, lumber and scrap copper; the impact of changes in commodity prices, such as oil, copper and chemicals, on product margins; the extent of the dependence of certain of our businesses on certain market sectors and customers; economic, political and environmental conditions in international markets, including governmental changes, tariffs, restrictions on trade and restrictions on the ability to transfer capital across countries; general economic and business conditions; potential difficulties in protecting our intellectual property; the ratings on our debt and our ability to repay or refinance our outstanding indebtedness as it matures; our ability to operate within the limitations of our debt covenants; unexpected business disruptions; potential delays in timing or changes to expected benefits from cost reduction efforts; potential impairment of our goodwill and/or long-lived assets; demand for Koppers goods and services; competitive conditions; capital market conditions, including interest rates, borrowing costs and foreign currency rate fluctuations; disruptions and inefficiencies in the supply chain; changes in laws; the impact of environmental laws and regulations; unfavorable resolution of claims against us, as well as those discussed more fully elsewhere in this release and in documents filed with the Securities and Exchange Commission by Koppers, particularly our latest annual report on Form 10-K and any subsequent filings by Koppers with the Securities and Exchange Commission. Any forward-looking statements in this release speak only as of the date of this release, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after that date or to reflect the occurrence of unanticipated events.                 View original content to download multimedia: https://www.prnewswire.com/news-releases/koppers-reports-fourth-quarter-and-full-year-2024-results-provides-2025-outlook-302387332.html SOURCE KOPPERS HOLDINGS INC.

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