Koppers Reports First Quarter 2025 Results; Maintains 2025 Outlook for Adjusted EBITDA and EPS

Sales of $456.5 Million vs. $497.6 Million in Prior Year Quarter

Net (loss) income attributable to Koppers of $(13.9) Million vs. $13.0 Million in Prior Year Quarter

Diluted EPS of $(0.68) vs. $0.59 in Prior Year Quarter

Adjusted EPS of $0.71 vs. $0.62 in Prior Year Quarter

Adjusted EBITDA of $55.5 Million vs. $51.5 Million in Prior Year Quarter

Capital expenditures of $14.3 Million vs. $26.3 Million in Prior Year Quarter

Capital expenditures, net of insurance proceeds and sale of assets, of $10.0 Million vs. $25.8 Million in Prior Year Quarter

Koppers Holdings Inc., an integrated global provider of treated wood products, wood treatment chemicals, and carbon compounds, reported its first quarter of 2025 results.

Chief Executive Officer Leroy Ball said, “While volumes got off to a soft start to begin the year, the early returns from our cost reduction measures more than offset the impact from lower sales.  Better pricing and lower costs in our Railroad and Utility Products and Services (RUPS) segment and better overall operating performance and lower costs in our Carbon Materials and Chemicals (CMC) business more than offset the negative impact from lower sales volumes in Performance Chemicals (PC).  The result was one of our stronger first quarters from a profitability perspective, specifically RUPS and CMC, which is a positive sign of the potential for even greater improvement when demand improves from the current lower run rate.”

First Quarter Financial Performance

• RUPS net sales increased largely due to higher volumes from Class I crosstie customers, $4.6 million of price increases across most products, a nine percent increase in the volume of domestic utility poles, driven by the acquisition of Brown Wood, and increased activity in the railroad bridge services business. These increases were partly offset by lower volumes in the commercial crosstie business. Adjusted EBITDA increased due to higher sales and a $2.2 million benefit from lower operating expenses in the crossties business, partly offset by $2.5 million of higher raw material and allocated selling, general and administrative expenses.
• PC net sales decreased primarily due to 21.5 percent lower volumes of residential and industrial preservatives in the Americas due mostly to a market share shift in the U.S., along with reduced volumes due to weather. Foreign currency changes compared to the prior year period from international markets had an unfavorable impact on sales of $2.4 million in the current year period. Adjusted EBITDA decreased due to the net decrease in sales and higher raw material costs, partly offset by $3.7 million of lower logistics and selling, general and administrative expenses, particularly in North America.
• CMC net sales decreased mainly due to $10.8 million of volume decreases for phthalic anhydride as the company ramped down production of that product and lower sales prices for carbon pitch, where prices were down approximately eight percent globally. The decreases in carbon pitch prices were driven by market dynamics, particularly in Australasia. Foreign currency changes compared to the prior year period from international markets had an unfavorable impact on sales of $2.3 million in the current year period. Adjusted EBITDA increased due to $7.0 million of lower raw material and allocated selling, general and administrative expenses, particularly in North America, and a favorable sales mix, along with improved plant performance as a result of a plant outage in North America in the prior year period, partly offset by price decreases.
• Operating cash flow for the first quarter was $(22.7) million, compared with $(12.3) million in the prior year quarter. In the first quarter of 2025, the company paid $13.9 million related to the termination of its largest U.S. qualified pension plan.

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 is updating its sales forecast to be approximately $2.0 billion to $2.2 billion, compared with $2.17 billion previously.  The company expects to benefit from continued savings from its cost reduction initiatives and assuming no significant pull-back in demand and that the impact of tariffs can be mitigated as expected, including any impact on the efficiency of copper hedges, Koppers is maintaining its 2025 financial goals for adjusted EBITDA of approximately $280 million, adjusted EPS of $4.75 per share and operating cash flow of $150 million.

The forecasted operating cash flow includes 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.

Commenting on the revised forecast, Mr. Ball said, “Despite the economic uncertainty and softer demand experienced thus far in the early part of this year, I remain cautiously optimistic that we can achieve our previously communicated adjusted earnings per share guidance of $4.75 for the year.  The comprehensive assessment we conducted on the overall organization in the first quarter has uncovered a wealth of opportunity to improve profitability and we have already begun taking actions.  Through the momentum generated by these measures, some of which have already been put into motion, I believe we can secure a buffer to offset any prevailing headwinds.”

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 above. Please see the “Safe Harbor Statement” below for more information.

For the full first quarter results, click here.

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.

Contact:

Ms. Quynh McGuire – Media Contact – McGuireQT@koppers.com – (412) 227-2049

Source: Koppers Holdings, Inc.