Koppers Holdings Inc. (NYSE:KOP) Q3 2017 Earnings Conference Call Transcript

Nov 09, 2017 • 11:00 am ET

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Koppers Holdings Inc. (NYSE:KOP) Q3 2017 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good day and welcome to the Koppers Holdings Incorporated Third Quarter 2017 Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Ms. Quynh McGuire; Director of IR, please go ahead, ma'am.

Executive
Quynh McGuire

Thanks and good morning. I'm Quynh McGuire, Director of IR and Corporate Communications. Welcome to our third quarter earnings conference call. We issued our quarterly earnings press release earlier today. You may access this announcement via our website at www.koppers.com. As indicated in our earnings release this morning, we've also posted materials to the IR page of our website that will be referenced in today's call. Consistent with our practice in prior quarterly conference calls, this is being broadcast live on our website and a recording of this call will be available on our site for replay through December 8, 2017.

(Forward-Looking Cautionary Statements) Joining me today for our call are Leroy Ball, President and CEO of Koppers and Mike Zugay, CFO. I'll now turn this discussion over to Leroy Ball.

Executive
Leroy Ball

Thanks, Quynh. Welcome everybody to our 2017 third quarter earnings call. As usual, I'll start by reviewing the latest progress made on our journey to Zero Harm. In September, we held our second annual Zero Harm, Zero Waste leadership forum at Pittsburgh where we convened more than 70 leaders from across the world to reaffirm their commitment to leading safe and responsible operations. The forum's agenda included introducing the next phase of our safety development which is centered on understanding and influencing behavior. In addition, we spent time sharing with each other, the challenges, opportunities and lessons learned that we've experienced thus far on our journey to 0. I'm incredibly proud that our team remains steadfast in the belief that if we put our people first, results will follow and while we're still far from perfect at Koppers, we are demonstrating that safety and profitability can co-exist and when they do, the strength and sustainability of the company improves in a significant way.

Now let's talk about our September quarter financial performance, which is our best ever from an adjusted EPS and adjusted EBITDA standpoint with those numbers finishing at a $1.43 per share and $60.5 million respectively. In fact, we shattered our previous high for adjusted EPS, which was a $1.20 in the third quarter of 2008 and our previous high for adjusted EBITDA of $57.8 million was also in the third quarter of 2008. Now at a high level, we continued to benefit during the quarter from some market tailwinds in most of our CM&C end markets that combined with the benefits we continue to create from our restructuring plan resulted in significant outperformance from an overall company standpoint.

Now the rail business has continued to be soft, which by extension translates to a softer creosote market. Our strategy to focus our production decisions in North America and Europe on our creosote requirement has created a situation of better balancing the supply/demand requirements of the other coal