Koppers Holdings Inc. reported net income for the Q1 2024 of $13.0 million, or $0.59 per diluted share, compared to $25.5 million, or $1.19 per diluted share, in the prior year quarter.
Adjusted net income and adjusted earnings per share (EPS) were $13.6 million and $0.62 per share for the Q1 2024, compared to $24.0 million and $1.12 per share in the prior year quarter.
Consolidated net sales of $497.6 million decreased by $15.8 million, or 3.1%, compared with $513.4 million in the prior year. Excluding a $2.5 million unfavorable impact from foreign currency changes, sales decreased by $13.3 million, or 2.6%.
CEO Leroy Ball said, “As projected, PC and RUPS showed year-over-year improvement in profitability, which was unfortunately negated by slumping CMC markets. Weather-related plant outages and higher costs early in the quarter ultimately became too much to overcome as end markets performed mostly as expected. Additionally, various unfavorable factors affected our rail maintenance-of-way businesses and created an additional unexpected earnings drag. A mixed market outlook and specific short-term customer challenges are causing us to be cautious about the remainder of 2024. Our team will continue to focus on the things that we can control, particularly actions related to cost reduction and free cash flow.”
2024 Outlook
Koppers continues to expand and optimize its business and make further progress on the company’s strategic pillars toward its long-term financial goals. After considering global economic conditions, as well as the ongoing uncertainty associated with geopolitical and supply chain challenges, Koppers expects 2024 sales of approximately $2.25 billion, compared with $2.15 billion in 2023. Adjusted EBITDA is anticipated to be approximately $265 million to $280 million in 2024, including the acquisition of Brown Wood Preserving which closed on April 1, 2024, compared with $256.4 million in 2023.
The effective tax rate for adjusted net income attributable to Koppers in 2024 is projected to be approximately 28 percent, slightly above the adjusted tax rate in 2023. Accordingly, 2024 adjusted EPS is forecasted to be in the range of $4.10 to $4.60 per share, compared with $4.36 per share in 2023.
Koppers expects operating cash flows of approximately $150 million in 2024, excluding any impact from pension termination. The company is pursuing a termination of its U.S. qualified pension plan and is targeting this effort for completion in the Q1 2025. An estimated $25 million of funding will be required when this is completed, which will impact operating cash flow in 2025.
Koppers anticipates capital expenditures of approximately $80 million to $90 million in 2024, including capitalized interest, with approximately $23 million to $33 million allocated to discretionary projects.
Koppers, with corporate headquarters in Pittsburgh, Pennsylvania, is an integrated global provider of treated wood products, wood treatment chemicals, and carbon compounds.
