Koppers Holdings(US:KOP)2021-05-09 21:24Financial Data and Key Metrics Changes - Consolidated sales reached $408 million, a record for the first quarter, up from $402 million in the prior year [33] - Adjusted EBITDA for the quarter was $55 million or 13.5%, up from $38 million or 9.4% in the prior year [34] - Net debt at the end of March was $766 million with $326 million in available liquidity, projecting $30 million of debt reduction for 2021 [42] Business Line Data and Key Metrics Changes - RUPS sales were $192 million, slightly up from $190 million, driven by Class I volume increases and higher demand in railroad services [35] - Performance Chemicals (PC) sales rose to $124 million from $111 million, attributed to high demand for copper-based preservatives and home repair projects [37] - CMC sales decreased to $92 million from $101 million, primarily due to lower volumes of phthalic anhydride and carbon pitch [39] Market Data and Key Metrics Changes - The average pricing of major products increased by 15% compared to the fourth quarter, while coal tar costs rose by 11% [41] - Existing home sales rose 12.3% year-over-year in March 2021, indicating a strong housing market [57] - The Railway Tie Association forecasts 2.7% growth in 2021 for crossties, driven by the commercial market [73] Company Strategy and Development Direction - The company plans to host an Investor Day on September 13, 2021, to discuss future strategies and growth opportunities [9] - There is a focus on increasing market share in the crosstie market and renewing key Class I contracts by the end of 2021 [72] - The company is exploring new product introductions and acquisitions to bolster its aging product portfolio [62] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the demand for Performance Chemicals, expecting EBITDA to meet or exceed prior year levels [49] - Concerns were raised about potential inflationary pressures impacting the housing market and home equity borrowing [98] - The company remains focused on optimizing operations and driving down costs while exploring growth opportunities [101] Other Important Information - The company has implemented a $250 incentive for employees to get vaccinated against COVID-19 [16] - The Follansbee facility sale is expected to save considerable ongoing costs and refocus cash towards growth opportunities [89] - The company is committed to sustainability and community engagement, as demonstrated by various initiatives [31] Q&A Session Summary Question: Outlook on the housing market and its impact on Performance Chemicals - Management noted a solid foundation in the housing market but highlighted inflation as a potential risk factor [98][100] Question: Class I volumes and commercial crosstie business outlook - Management indicated that untreated crosstie availability is crucial for maintaining supply and pricing dynamics [116] Question: Margin dynamics in the CMC business - Management expects positive trends in North America due to improved supply-demand dynamics and higher pricing [125]