Koppers Holdings, Inc. Q1 FY2025 earnings call

• In late 2024, Koppers resized employee base and improved cost structure. Global employee base reduced by 5% and SG&A finished the quarter $4.1 million lower than Q1 2024. - Achieved consolidated sales of $456.5 million, adjusted EBITDA of $55.5 million with 12.2% margin, strongest Q1 margin since 2021. - Acquired Brown Wood Preserving Company, expanding capabilities in pressure treated wood utility poles and geographic reach. - Committed to sustainability, named to USA Today's list of America's Climate Leaders and honored with CSX Chemical Safety Excellence Award. - 31 out of 41 facilities worldwide operating accident free for the quarter, leading activities to reduce recordable injuries and serious safety incidents.

Consolidated first quarter sales were $457 million, a decrease of $41 million or 8% from the prior year quarter. By segment, RUPS sales increased by $10 million or 4% compared with the prior year, while PC sales were lower by $29 million or 19.5% and CM&C sales decreased by $22 million or 18%. Adjusted EBITDA for the first quarter was $56 million with a 12.2% margin. By segment, RUPS generated adjusted EBITDA of $26 million with an 11% margin. PC delivered adjusted EBITDA of $20 million and a 17% margin, while CM&C reported adjusted EBITDA of $10 million with a 10% margin.

• Expect consolidated sales to reach $2 billion to $2.2 billion in 2025 compared with $2.1 billion in 2024. - Maintaining adjusted EBITDA forecast of $280 million compared with $262 million in 2024. - Expect adjusted earnings per share of $4.75 per share in 2025 compared with $4.11 in 2024. - Projecting net capital spending of $65 million in 2025 compared with $74 million in 2024.

• Economic uncertainty could dampen enthusiasm in the industry to move forward with projects. - Tariff activity and its direct and unintended consequences could weigh on near-term demand. - Market share loss and lingering softness in some end markets. - Colder winter and broader economic uncertainty stifling individuals' decisions to spend discretionary dollars on outdoor projects. - Sawmill suppliers' export volume drying up affecting hardwood prices for crossties.

Q: If trending towards low end of sales guidance, do you have additional flex down on costs to reach adjusted EBITDA?

A: We do. We're actively going after a number of different cost measures. The closer it gets to the low end of the sales range, the tougher it will be, but we have items in process that were reflected in the first quarter and expect to continue moving forward.

Q: Why not accelerate stock buyback given depressed share price?

A: We don't speak specifically about intentions in any particular quarter. We did repurchase shares in the first quarter from the new plan. We have limitations within credit agreements in terms of what we're able to do annually. We will continue to monitor the situation and be consistent in our approach to repurchasing shares as the year goes on.