Financial Performance - Koppers' Q2 2025 sales were $5048 million, a 104% decrease compared to $5632 million in Q2 2024[28] - Adjusted EBITDA for Q2 2025 was $771 million, slightly down from $775 million in Q2 2024[31] - The company generated cash flow exceeding $50 million in Q2[6] - Koppers is aiming for mid-to-high teens margins by the end of 2027[6] Segment Performance - Railroad and Utility Products and Services (RUPS) sales decreased from $2539 million in Q2 2024 to $2504 million in Q2 2025[95] - Performance Chemicals (PC) sales decreased from $1769 million in Q2 2024 to $1508 million in Q2 2025, a 15% volume decrease primarily in the Americas[46, 95] - Carbon Materials and Chemicals (CMC) sales decreased from $1324 million in Q2 2024 to $1036 million in Q2 2025, driven by volume decreases and lower sales prices[52, 95] Strategic Initiatives - Koppers launched "Catalyst," a strategic transformation to improve profitability and shareholder value[6, 22] - The company reduced Year-To-Date Selling, General and Administrative Expense (SG&A) by 13% compared to the prior year[6] - Koppers reduced headcount for 14 consecutive months, with Full-Time Employees (FTEs) 11% lower compared to April 2024[6] - The sale of Koppers Railroad Structures is expected to close in Q3 2025, with a 5-year sales average of $36 million and a 5-year EBITDA average of $2 million[6, 21]

Core Viewpoint - Koppers reported quarterly earnings of $1.48 per share, slightly missing the Zacks Consensus Estimate of $1.49 per share, but showing an increase from $1.36 per share a year ago [1][2] Financial Performance - The earnings surprise for the quarter was -0.67%, while the previous quarter saw a positive surprise of +26.79% with actual earnings of $0.71 per share against an expectation of $0.56 [2] - Koppers' revenues for the quarter ended June 2025 were $504.8 million, missing the Zacks Consensus Estimate by 9.42%, and down from $563.2 million year-over-year [3] Stock Performance - Koppers shares have increased approximately 2.7% since the beginning of the year, compared to a 7.8% gain in the S&P 500 [4] - The current Zacks Rank for Koppers is 3 (Hold), indicating expected performance in line with the market in the near future [7] Future Outlook - The consensus EPS estimate for the upcoming quarter is $1.58 on revenues of $549.7 million, and for the current fiscal year, it is $4.61 on revenues of $2.02 billion [8] - The outlook for the Chemical - Diversified industry, to which Koppers belongs, is currently in the bottom 7% of over 250 Zacks industries, which may impact stock performance [9]

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) Koppers reported a 10.4% decrease in net sales to $504.8 million for Q2 2025, with net income falling 38.8% to $16.4 million, while adjusted metrics showed modest increases | Financial Metric | Q2 2025 | Q2 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $504.8 million | $563.2 million | $(58.4) million | -10.4% | | Net Income | $16.4 million | $26.8 million | $(10.4) million | -38.8% | | Diluted EPS | $0.81 | $1.25 | $(0.44) | -35.2% | | Adjusted Net Income | $29.9 million | $29.2 million | $0.7 million | 2.4% | | Adjusted EPS | $1.48 | $1.36 | $0.12 | 8.8% | | Adjusted EBITDA | $77.1 million | $77.5 million | $(0.4) million | -0.5% | - CEO Leroy Ball noted that despite sluggish demand and lower top-line revenue, the company's performance was strong due to cost-saving actions from the 'Catalyst' transformation process, including an **11% reduction in the global employee base** since April 2024 and the exit from the phthalic anhydride business[6](index=6&type=chunk) - Year-to-date capital expenditures were significantly lower at **$26.4 million** compared to **$43.4 million** in the prior year period, enabling debt reduction and capital return to shareholders through share repurchases and dividends[7](index=7&type=chunk)[6](index=6&type=chunk) [Business Segment Performance](index=2&type=section&id=Business%20Segment%20Performance) All three business segments experienced a decline in net sales, but adjusted EBITDA performance was mixed, with RUPS and CMC seeing significant increases while PC decreased | Segment Net Sales (Q2 2025) | Amount | vs. Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Railroad and Utility Products and Services | $250.4 million | $(3.5) million | -1.4% | | Performance Chemicals | $150.8 million | $(26.1) million | -14.8% | | Carbon Materials and Chemicals | $103.6 million | $(28.8) million | -21.8% | | Segment Adjusted EBITDA (Q2 2025) | Amount | vs. Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Railroad and Utility Products and Services | $31.6 million | $9.2 million | 41.1% | | Performance Chemicals | $28.7 million | $(15.6) million | -35.2% | | Carbon Materials and Chemicals | $16.8 million | $6.0 million | 55.6% | [Railroad and Utility Products and Services (RUPS)](index=2&type=section&id=Railroad%20and%20Utility%20Products%20and%20Services%20(RUPS)) RUPS net sales slightly decreased due to lower Class I crosstie volumes, but adjusted EBITDA surged by 41.1% driven by reduced expenses - Net sales decrease was driven by lower volumes from Class I crosstie customers and reduced activity in the crosstie recovery business[10](index=10&type=chunk) - Adjusted EBITDA increased significantly due to **$7.7 million** in lower raw material, SG&A, and freight expenses, along with net sales price increases[10](index=10&type=chunk) [Performance Chemicals (PC)](index=2&type=section&id=Performance%20Chemicals%20(PC)) PC net sales dropped 14.8% due to volume decreases in the Americas, and adjusted EBITDA fell 35.2% impacted by higher raw material costs - The sales decline was primarily caused by a **15% volume decrease**, mostly in the Americas, resulting from a shift in U.S. market share[10](index=10&type=chunk) - Adjusted EBITDA decreased due to higher raw material costs and lower sales volumes, despite being partly offset by **$2.2 million** in lower SG&A expenses[10](index=10&type=chunk) [Carbon Materials and Chemicals (CMC)](index=2&type=section&id=Carbon%20Materials%20and%20Chemicals%20(CMC)) CMC net sales fell 21.8% due to discontinued phthalic anhydride production, but adjusted EBITDA grew 55.6% driven by cost reductions and favorable sales mix - The discontinuation of phthalic anhydride production led to a **$20.4 million** decrease in sales volume; lower volumes for carbon black feedstock and lower prices for carbon pitch also contributed to the sales decline[10](index=10&type=chunk) - Adjusted EBITDA increased due to **$11.5 million** in lower raw material, SG&A, and operating expenses, particularly in North America, and a favorable sales mix[10](index=10&type=chunk) [2025 Financial Outlook](index=2&type=section&id=2025%20Financial%20Outlook) Koppers revised its full-year 2025 guidance downwards for sales and adjusted EBITDA due to soft demand, while maintaining operating cash flow projections | Metric | 2025 Forecast (Revised) | 2024 Actual | | :--- | :--- | :--- | | Net Sales | $1.9 - $2.0 billion | $2.09 billion | | Adjusted EBITDA | $250 - $270 million | $261.6 million | | Adjusted EPS | $4.00 - $4.60 | $4.11 | | Operating Cash Flow | $150 million | $119.4 million | | Capital Expenditures | $52 - $58 million | $77.4 million | - The company revised its sales and earnings forecast down due to the current competitive environment, global economic conditions, and ongoing geopolitical and supply chain uncertainty[9](index=9&type=chunk) - Despite the guidance revision, the midpoint of the adjusted EPS forecast represents an approximate **5% increase** over 2024, with free cash flow in the second half planned primarily for debt reduction[12](index=12&type=chunk) - The 'Catalyst' transformation process is expected to help achieve a sustainable **mid to high teens adjusted EBITDA margin** in the next two to three years[13](index=13&type=chunk) [Consolidated Financial Statements](index=5&type=section&id=Consolidated%20Financial%20Statements) The unaudited consolidated financial statements show a significant drop in net income for the first six months of 2025, while operating cash flow improved [Statement of Operations](index=5&type=section&id=Statement%20of%20Operations) For Q2 2025, net sales and net income decreased, with a significant six-month impact from impairment and pension settlement charges | (In millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net Sales | $504.8 | $563.2 | | Operating Profit | $39.1 | $57.5 | | Net Income | $16.4 | $26.8 | | Diluted EPS | $0.81 | $1.25 | | (In millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net Sales | $961.3 | $1,060.8 | | Operating Profit | $66.1 | $92.1 | | Net Income | $2.5 | $39.8 | | Diluted EPS | $0.12 | $1.83 | [Balance Sheet](index=6&type=section&id=Balance%20Sheet) As of June 30, 2025, total assets slightly increased to $1,930.8 million, total liabilities remained stable, and total equity grew due to comprehensive loss changes | (In millions) | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $708.0 | $680.6 | | Total Assets | $1,930.8 | $1,890.2 | | Total Current Liabilities | $272.3 | $325.8 | | Long-Term Debt | $962.9 | $925.9 | | Total Liabilities | $1,403.7 | $1,401.2 | | Total Equity | $527.1 | $489.0 | [Statement of Cash Flows](index=7&type=section&id=Statement%20of%20Cash%20Flows) Net cash from operating activities improved to $27.8 million for the six-month period, while investing activities decreased significantly due to no acquisitions | (In millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $27.8 | $14.9 | | Net cash used in investing activities | $(39.3) | $(141.6) | | Net cash provided by financing activities | $3.3 | $111.6 | | Net decrease in cash | $(5.5) | $(17.6) | [Non-GAAP Reconciliations](index=8&type=section&id=Non-GAAP%20Reconciliations) The report provides detailed reconciliations of GAAP net income and diluted EPS to adjusted non-GAAP measures, primarily accounting for impairment and restructuring charges [Reconciliation of Net Income to Adjusted EBITDA](index=8&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20EBITDA) Q2 2025 Net Income of $16.4 million was reconciled to Adjusted EBITDA of $77.1 million by adding back interest, taxes, D&A, and significant impairment/restructuring costs - Key adjustments to reconcile Q2 2025 Net Income to Adjusted EBITDA include adding back **$17.3 million** in interest, **$18.0 million** in D&A, **$7.5 million** in taxes, and a net **$17.9 million** in other adjustments[37](index=37&type=chunk) - The largest single adjustment for the quarter was **$17.6 million** related to impairment, restructuring, and plant closure costs[37](index=37&type=chunk) [Reconciliation to Adjusted Net Income and Adjusted EPS](index=9&type=section&id=Reconciliation%20to%20Adjusted%20Net%20Income%20and%20Adjusted%20EPS) For Q2 2025, GAAP Net Income of $16.4 million was adjusted by $13.5 million (net of tax) to reach Adjusted Net Income of $29.9 million, resulting in an Adjusted EPS of $1.48 | (Q2 2025) | GAAP | Adjustments (Net of Tax) | Non-GAAP (Adjusted) | | :--- | :--- | :--- | :--- | | Net Income | $16.4 million | $13.5 million | $29.9 million | | Diluted EPS | $0.81 | $0.67 | $1.48 | [Supplementary Information](index=3&type=section&id=Supplementary%20Information) This section includes standard corporate information, details for the investor conference call, and the required Safe Harbor Statement regarding forward-looking statements [About Koppers](index=3&type=section&id=About%20Koppers) Koppers is a global provider of treated wood products, wood preservation technologies, and carbon compounds, focusing on preserving key infrastructure elements - Koppers (NYSE: KOP) is a global provider of treated wood products, wood preservation technologies, and carbon compounds, focusing on infrastructure preservation[18](index=18&type=chunk) [Investor Conference Call Information](index=3&type=section&id=Investor%20Conference%20Call%20Information) Koppers management will host a conference call on August 8, 2025, at 11:00 a.m. Eastern Time to discuss the second-quarter results - A conference call to discuss Q2 2025 results is scheduled for **11:00 a.m. Eastern Time** on the day of the release[14](index=14&type=chunk) [Safe Harbor Statement](index=4&type=section&id=Safe%20Harbor%20Statement) This statement cautions that the press release contains forward-looking statements subject to various risks and uncertainties that could cause actual results to differ materially - The release contains forward-looking statements subject to known and unknown risks, uncertainties, and contingencies that could cause actual results to differ materially[24](index=24&type=chunk)[25](index=25&type=chunk) - Key risk factors include fluctuations in raw material prices, changes in commodity prices, international market conditions, and supply chain disruptions[26](index=26&type=chunk)

Core Viewpoint - Koppers Holdings Inc. reported a decline in net sales and net income for the second quarter of 2025, attributed to sluggish demand across all business segments, while adjusted earnings showed slight improvement due to cost-saving measures and operational efficiencies [3][5][7]. Financial Performance - Net sales for Q2 2025 were $504.8 million, down from $563.2 million in Q2 2024, representing a decrease of $58.4 million or 10.4% [2][5]. - Net income attributable to Koppers was $16.4 million, a decline of $10.4 million or 38.8% from $26.8 million in the prior year [2][5]. - Diluted earnings per share (EPS) decreased to $0.81 from $1.25, a drop of 35.2% [2][5]. - Adjusted EPS increased to $1.48 from $1.36, reflecting a growth of 8.8% [2][5]. - Adjusted EBITDA was $77.1 million, slightly down from $77.5 million, a decrease of 0.5% [2][5]. Segment Performance - Railroad and Utility Products and Services net sales were $250.4 million, down 1.4% from $253.9 million [4][29]. - Performance Chemicals net sales decreased by 14.8% to $150.8 million from $176.9 million [4][29]. - Carbon Materials and Chemicals saw a 21.8% decline in net sales to $103.6 million from $132.4 million [4][29]. - Adjusted EBITDA margins improved in Railroad and Utility Products and Services to 12.6%, while Performance Chemicals decreased to 19.0% [4][29]. Operational Insights - The company has experienced a 14-month decline in its global employee base, totaling an 11% reduction since April 2024 [3]. - The exit from the phthalic anhydride business has positively impacted margins [3]. - Strong operating cash flow and reduced capital expenditures allowed for debt reduction and capital return to shareholders through share repurchases and dividends [3]. 2025 Outlook - Koppers revised its sales forecast to approximately $1.9 billion to $2.0 billion, down from a previous estimate of $2.0 billion to $2.2 billion [7][8]. - Adjusted EBITDA is now projected to be between $250 million and $270 million, with adjusted EPS expected to be approximately $4.00 to $4.60 per share [7][8]. - The company anticipates significant benefits from cost reduction initiatives despite ongoing demand challenges [7][9]. Strategic Initiatives - The Catalyst transformation process initiated at the beginning of 2025 is expected to achieve a sustainable mid to high teens adjusted EBITDA margin in the next two to three years [10]. - The company plans to utilize the majority of free cash flow generated in the latter half of the year to reduce borrowings [9].

Core Viewpoint - Koppers Holdings Inc. is set to release its financial results for Q2 2025 on August 8, 2025, and will discuss its outlook during a conference call later that day [1]. Company Overview - Koppers Holdings Inc. is an integrated global provider of treated wood products, wood treatment chemicals, and carbon compounds, employing 2,100 people [4]. - The company focuses on creating, protecting, and preserving essential infrastructure elements, including railroad crossties, utility poles, and outdoor wooden structures, while also providing production feedstocks for steel, aluminum, and construction materials [4]. - Koppers emphasizes innovation and sustainability in its operations, aiming to provide safe solutions for rail transportation and power supply [4]. Conference Call Details - The financial results will be discussed in a conference call scheduled for 11:00 a.m. Eastern Time on August 8, 2025, with presentation materials available 15 minutes prior [1]. - Interested parties can access the live audio broadcast by dialing specific toll-free numbers for the U.S., Canada, and international participants, with a request to join the call five minutes early for registration [2]. - An audio replay of the call will be available approximately two hours after its completion and can be accessed until November 8, 2025 [3].

Core Insights - The article emphasizes the importance of efficiency levels in assessing a company's potential for profitability, suggesting that higher efficiency correlates with better price performance [1] Efficiency Ratios - Receivables Turnover measures a company's ability to extend credit and collect debts, with a higher ratio indicating better performance [2] - Asset Utilization indicates how effectively a company converts its assets into sales, with higher values suggesting greater efficiency [3] - Inventory Turnover assesses a company's ability to manage inventory relative to its cost of goods sold, where a higher ratio indicates better inventory management [4] - Operating Margin reflects a company's control over operating expenses, with higher margins indicating more efficient expense management [5] Screening Criteria - The screening process included efficiency ratios that surpassed industry averages, narrowing down over 7,906 stocks to 12 candidates [7] - A favorable Zacks Rank of 1 (Strong Buy) was also included to enhance the profitability of the strategy [6] Selected Stocks - Post Holdings (POST), CarGurus (CARG), and Koppers (KOP) were identified as top stocks based on strong efficiency metrics, each exceeding industry averages [8] - POST reported an average earnings surprise of 22.9%, CARG had 11.8%, and KOP achieved 6% [8][9][10][11]

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis to find compa ...

Core Insights - Koppers Holdings Inc. published its 2024 Corporate Sustainability Report, highlighting progress in its Sustainability Plan focused on People, Planet, and Performance [1] - The company aims to strengthen its Sustainability strategy and governance, setting new targets through 2030 to ensure sustainability remains integral to operations [1] Sustainability Achievements - Achieved a Total Recordable Incident Rate (TRIR) of 2.52, the lowest in company history, reflecting a commitment to a Zero Harm culture [5] - Increased solar energy production by 53% year-over-year, including a new 100-kilowatt solar panel system at the Mayfield, Australia facility [5] - Delivered 40,000 utility poles to aid recovery efforts after hurricanes Helene and Milton [5] - Launched Koppers Sustainability Cloud, a data hub for improved reporting aligned with global industry standards [5] - Recognized for the fifth consecutive year as one of Newsweek's Most Responsible Companies, achieving the highest placement ever [5] - Named to USA Today's listing of America's Climate Leaders for the third consecutive year [5] Company Overview - Koppers is an integrated global provider of treated wood products, wood preservation technologies, and carbon compounds, employing 2,000 individuals [2] - The company focuses on creating and preserving essential infrastructure elements, including railroad crossties and utility poles, while innovating to meet future needs [2]

Core Points - Koppers Holdings Inc. has successfully extended the maturity date of its $800 million revolving credit facility to June 17, 2030, or 91 days prior to the maturity date of its secured term loan facility [1][2] - The transaction modifies the total net leverage ratio financial covenant, increasing the test from 4.50:1.00 to 4.75:1.00 through the life of the deal [2] - The interest rate margins on the Revolving Facility have been adjusted by removing a 10 basis points credit spread adjustment for certain SOFR loans [2] - All other material terms and conditions of the Revolving Facility remain unchanged [3] - The CFO expressed satisfaction with the extension, highlighting its role in strengthening the company's capital position and enhancing financial flexibility [3] Company Overview - Koppers is an integrated global provider of treated wood products, wood preservation technologies, and carbon compounds, employing 2,100 people [4] - The company focuses on creating and preserving essential infrastructure elements, including railroad crossties and utility poles, while innovating to meet future needs [4]

Koppers (KOP) Conference Summary - June 12, 2025 Company Overview - Koppers is a leading supplier in critical infrastructure products, particularly in the railroad and utility sectors, with significant market shares in North America and Australia [12][13] Key Points and Arguments Strategic Focus - Koppers has been implementing a strategy over the past five years aimed at improving profitability through internal projects, resulting in lower expected capital spending in the near term, which is anticipated to enhance cash flow [6][7] Market Leadership - The company holds a number one or two position in critical end markets, including railroad products and utility poles, supplying major utilities and railroads in North America [12][13] Product Portfolio - Koppers' product offerings include: - Railroad crossties, with a significant market share among Class 1 railroads in North America - Utility poles, supplying eight of the ten largest utilities in the U.S. - Performance chemicals for wood treatment, serving the top ten lumber treating companies in the U.S. [12][13][14] Financial Performance - In the first quarter, Koppers reported a decrease in top-line revenue by approximately $40 million, primarily due to reduced performance in the chemicals business, but managed to increase adjusted EBITDA by around $44 million [29][30] - The adjusted EBITDA margin improved to 12%, with a long-term goal of reaching mid-teens [31] Capital Expenditures and Debt Management - Capital expenditures are projected to be around $65 million for the year, down from over $100 million in previous years due to the completion of major projects [32] - The company is focused on debt reduction, with current debt around $909 million and a long-term leverage target of 2-3 times [33][55] Share Repurchase and Dividends - Koppers has a share repurchase program, having repurchased $15 million in stock in the first quarter, with plans for opportunistic buying [34][51] - The company has steadily increased its dividend, currently at 8 cents per quarter [35] Growth Drivers - The performance chemicals business is driven by repair and remodeling spending, which has remained strong despite inflation [36] - The carbon materials and chemicals segment is linked to the aluminum industry, with demand driven by overall economic strength [37] Market Dynamics - The railroad sector is experiencing increased volume driven by maintenance and repair needs, with a cyclical nature to spending [42][44] - Pricing dynamics in contracts with railroads and utility providers can limit price increases, but there is more flexibility in utility contracts [46][48] Market Perception - Koppers' diversified business model allows for steady earnings streams, which may not be fully recognized by the market [50] Additional Important Insights - The company has reduced its carbon materials and chemicals business from 11 plants to 3 core plants over the past decade due to changing market conditions [26] - The utility pole business has a significant replacement demand, with 2-3 million poles needing replacement annually [21] This summary encapsulates the key insights from the Koppers conference, highlighting the company's strategic direction, market position, financial performance, and growth opportunities.