Financial Data and Key Metrics Changes - Adjusted EBITDA for 2025 was $256.7 million, with a 13.7% adjusted EBITDA margin, marking a new high for Koppers [6][7] - Operating profit reached $167.8 million, and adjusted earnings per share were $4.07, maintaining above $4 for six consecutive years [7] - Operating cash flow was $122.5 million, continuing a streak of over $100 million for seven years [7] - Capital expenditures were normalized to $55 million, with $38.2 million allocated for share repurchases and $6.4 million for dividends [7][24] Business Line Data and Key Metrics Changes - Full year sales totaled $1.9 billion, a 10% decrease from $2.1 billion in the previous year [16] - RUPS sales were $927 million, PC sales were $544 million, and CMMC sales were $409 million, all showing declines compared to the prior year [16] - Adjusted EBITDA for RUPS was $108 million (12% margin), PC was $103 million (19% margin), and CMMC was $46 million (11% margin) [17] Market Data and Key Metrics Changes - The market sentiment for 2026 is interpreted as neutral to slightly positive, with flat overall market demand expected [29] - Existing home sales in 2025 were flat compared to 2024, with a disappointing 8% month-over-month decline in January 2026 [30] - The average mortgage rates fluctuated between 6.2%-6.3% in Q4 2025, currently at about 6% [30] Company Strategy and Development Direction - The company launched a transformation process named Catalyst, which delivered $46 million in benefits during 2025 [8] - Koppers aims for double-digit adjusted EPS growth over the next three years and $300 million of cumulative free cash flow [9] - The company is focusing on increasing the share of PC and RUPS to 85% of total sales, which would also reflect in EBITDA contributions [70] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the impact of recent tariff changes, which may improve the company's position [27] - The company anticipates a top-line increase of approximately 11% in 2026 for the Performance Chemicals segment, driven by market share expansion [29] - Management acknowledged ongoing challenges in the railroad products and services business due to customer capital spending reductions [39] Other Important Information - Koppers was recognized in Newsweek's listing of America's Most Responsible Companies for the sixth consecutive year [12] - The board declared a quarterly cash dividend of $0.09 per share, reflecting a 13% increase from 2025 [25] Q&A Session Summary Question: Market share recovery in Performance Chemicals - Management acknowledged a market share hit in 2025 but indicated success in converting some business back in 2026, primarily from existing customers [60][61] Question: Catalyst benefits breakdown for 2026 - Management targeted Catalyst benefits of $20 million to $40 million for 2026, with a heavier impact expected on the COGS side [62] Question: Rationale for retaining CMMC business - Management explained that CMMC is a significant component of the supply chain, and while they are actively reviewing the business portfolio, no decisions have been made regarding divestiture [72][81] Question: Increase in depreciation and amortization (DNA) - Management indicated that the increase in DNA is likely due to timing as projects move into the depreciation phase, with expectations for a decrease in 2026 [88][96] Question: Interest expense reduction - Management noted that lower interest rates and reduced overall borrowing contributed to the decrease in interest expense [100][103]

Financial Data and Key Metrics Changes - Consolidated second quarter sales were $500 million, down 10.4% from the prior year [18] - Adjusted EBITDA for the second quarter was $77 million with a 15.3% margin, marking the first time in eight years that adjusted EBITDA margins exceeded 15% [19][62] - The company generated cash flow of over $50 million in the quarter and reduced net debt by approximately $20 million [7][25] Business Line Data and Key Metrics Changes - RUPS segment sales decreased to $250 million from $254 million in the prior year, impacted by lower Class I crosstie volumes [19][20] - Performance Chemicals (PC) sales were $151 million, down from $177 million, with a 15% volume decrease primarily in The Americas [21] - Centimeters and C sales decreased to $104 million from $132 million, driven by lower volumes of phthalic anhydride and carbon black feedstock [22] Market Data and Key Metrics Changes - PC volumes were down by about 2% compared to prior year expectations of a couple percent improvement [29] - Class I demand is expected to tail off in the second half, similar to the previous year [7] - The untreated crosstie market prices remained stable compared to last year, while crosstie procurement was down 13% [20] Company Strategy and Development Direction - The company is focused on transforming into a high-performance organization aiming for mid to high teens EBITDA margins by 2027 [6][14] - A definitive agreement was signed to sell the railroad structures business, which has been a drag on margins [12] - The Catalyst transformation process was launched to improve business operations and unlock opportunities [13][14] Management's Comments on Operating Environment and Future Outlook - Management noted a sluggish demand environment across the portfolio, with expectations for the second half of the year to remain similar to the first half [7][30] - The company is revising its consolidated sales guidance for 2025 to $1.9 billion to $2 billion, reflecting a lack of material change in demand [38] - Despite the challenges, management remains optimistic about future performance improvements and margin expansion [42] Other Important Information - The company has been named to Time Magazine's America's Best Midsize Companies of 2025, recognizing exceptional performance and employee satisfaction [11] - The quarterly dividend was declared at $0.08 per share, representing a 14% increase over the previous year [24] Q&A Session Summary Question: How have the contracts with Class I customers been going? - Management indicated that long-term contracts are in place, and while they have maximized cost recovery, volume throughput remains a concern [47][48] Question: What is the outlook for the industrial side of the PC business? - Management noted that while there are signs of life in the industrial side, significant improvement will depend on the residential side recovering [52][53] Question: What is the status of the Catalyst transformation? - Management described Catalyst as a change management process aimed at unlocking opportunities and improving performance sustainably [60][61] Question: How will the proposed consolidation among rail companies affect the business? - Management stated it is too early to determine the impact of potential mergers among rail companies on pricing or demand [74] Question: What drives the target for high teens EBITDA margins? - Management emphasized that volume recovery across various business segments will significantly impact margins, alongside ongoing cost-saving initiatives [76][79]