Stock Market

Koppers Holdings Inc. Announces Record Financial Performance in 2023

PITTSBURGH, Feb. 28, 2024 /PRNewswire/ -- Koppers Holdings Inc. (NYSE: KOP), a leader in treated wood products, wood treatment chemicals, and carbon compounds, today declared a triumphant closure to 2023 with record-breaking earnings. The fourth-quarter net income allocated to Koppers was reported at $12.9 million or $0.59 per diluted share, against $13.8 million or $0.65 per diluted share in the previous year's respective quarter.

Adjusted net income for Koppers, along with adjusted earnings per share (EPS), were $14.5 million and $0.67 respectively for the fourth quarter of 2023. These figures represent a decrease from the prior year quarter's $23 million and $1.09 per share. Meanwhile, Koppers' adjusted EBITDA for the fourth quarter stood firm at $53.9 million, modestly outperforming the prior year's $52.1 million.

Financial Overview

Fourth Quarter Financial Highlights

Consolidated sales rose by 6.3 percent, marking an increase from $482.6 million in the previous year quarter to $513.2 million. This growth was driven by the Railroad and Utility Products and Services (RUPS) business segment, which reported record-breaking fourth-quarter sales of $216.4 million, a 12.1 percent increase from the previous year. Adjusted EBITDA for this segment also reached a new high at $20.7 million or 9.6 percent of sales, compared to $13.3 million or 6.9 percent previously. This surge in profitability was primarily due to increased pricing and improved plant utilization.

In contrast, the Carbon Materials and Chemicals (CMC) segment saw sales dive by 11 percent to $132.4 million from $148.8 million in the year-ago quarter. Lower market prices and weaker demand for most products predominantly influenced this slump, against which high carbon pitch volumes could not fully compensate.

Record Annual Results

Demonstrating robust annual growth, Koppers celebrated a record year with consolidated sales of $2.15 billion, marking an 8.8 percent hike compared to $1.98 billion in the former year. The RUPS and Performance Chemicals (PC) segments showcased impressive sales growth of 13.9 percent and 15.8 percent respectively, while the CMC segment lagged with a 4.5 percent sales decrease compared to the previous year.

Notably, net income attributable to Koppers spiked upwards to $89.2 million, from $63.4 million in the preceding year. Enhanced by strong cash flows, which reached a record $146.1 million for the year, and capital expenditures totaling $120.5 million.

Operational and Strategic Progress

Koppers' successful performance in 2023 was further accentuated by the diligent execution of its value creation strategy. Notable achievements included the highest diluted EPS from continuing operations, and recognition on Newsweek’s list of Most Responsible Companies for the third consecutive year, reflecting the company’s uncompromising dedication to safety and sustainability.

Optimistic Outlook for 2024

Despite looming economic uncertainties, Koppers sets forth into 2024 with confidence. Expected sales for 2024 stand at approximately $2.25 billion, with an anticipated adjusted EBITDA of roughly $275 million. The forecasted figures hinge on continued demand in established markets, realizing carry-over benefits from last year's pricing strategies, and cost efficiencies from operational improvements. Nevertheless, Koppers abstains from delineating itemized reconciliations of guidance against GAAP financial measures, citing the impracticability due to indeterminate elements that are challenging to forecast.

Unwavering Commitment to Excellence

Koppers' 2023 performance report brims with optimism and demonstrates the company's unwavering commitment to operational excellence. By strategically driving its diversified portfolio and steadfast focus on execution, the company has not only overcome environmental complexities but set the stage for sustained growth.

With a nod to its dedicated global team, whose assiduous efforts returned handsome dividends in challenging times, Koppers remains poised to traverse the peculiar business cycles of its segments, leveraging the headwinds of 2023 and converting them into tailwinds for 2024 and beyond.

As Koppers Holdings Inc. steers towards yet another promising year, they remain an esteemed exemplar of sustainable corporate success in the dynamic realm of wood treatment products and chemical services. Investors will likely watch with keen interest as Koppers continues to chart its pioneering course through the multifaceted and ever-evolving global industry landscape.