Koppers Holdings Inc. (NYSE:KOP) Q3 2019 Earnings Conference Call - Final Transcript

Nov 07, 2019 • 11:00 am ET


Koppers Holdings Inc. (NYSE:KOP) Q3 2019 Earnings Conference Call - Final Transcript


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Leroy Ball

ways to help make safety personal to each and every one throughout our company. Our SH&E coordinators are important ambassadors of our Zero Harm culture and their feedback on the progress made to date is invaluable.

The group also focused on finding ways to reduce Koppers' environmental impact and improve our standing as responsible members of the communities in which we operate. Additionally they participated in sessions geared toward using modern tools and technology to improve capabilities and build stronger connections across facilities. It was encouraging to see such great energy around these important topics. I appreciate the continuing dedication to safety that our employees have for themselves as well as their colleagues and community members. We remain focused on finding new and innovative ways to advance our journey to zero. Now I'll move on to financial performance. For the September quarter our net results reflect improvement across all business units and point toward continued positive momentum for the remainder of 2019 and heading into 2020. For the third quarter we again achieved record sales of $475 million making the third consecutive quarter of record sales at Koppers driven by continued demand in various end markets for wood preservation products and services.

From a profitability perspective we also set a record for third quarter adjusted EBITDA at $61 million or 13% achieving higher profitability in all business segments as well. RUPS and PC our wood-based businesses continued to demonstrate strong year-over-year gain through the favorable business conditions market share growth and cost efficiencies. Additionally our CMC business posted another strong quarter even though its market environment remains challenging. Our third quarter performance highlights the strength of our diversified business model and the success of our wood preservation strategy. Back on our call in February of this year I laid out 3 main takeaways to illustrate where our focus would be for 2019. The first takeaway was that we would be focused on doing everything possible to make 2019 better than 2018. Well nine months into this year we've put ourselves within reasonable striking distance of achieving that goal from an EBITDA standpoint and while beating our 2018 adjusted EBITDA is still reasonably possible we have tightened our guidance and the high end of our range will fall just shy of our fifth straight year of adjusted EBITDA improvement.

But from an adjusted EPS standpoint we will still have a strong chance of beating our 2018 number of $3.50 which would still be quite an accomplishment. Further to that because we are nearing the end of our lengthy restructuring of our CMC business special charges for 2019 will be significantly less than 2018 which means that our reported or GAAP EPS should finish the year at its highest level since 2012. And we came into 2019 knowing that we had a major gap to fill knowing that we would lose a significant chunk of earnings in our China business and I'm proud of how our people have taken on the challenge