Net loss for the quarter was $(2.7) million, or $(0.14) per diluted share compared to net income of $19.1 million, or $0.92 per diluted share in the third quarter of 2013. Adjusted net income and adjusted earnings per share were $12.3 million and $0.60 per share compared to $18.8 million and $0.90 per share in the prior year quarter. While Koppers North American railroad business improved as hardwood availability showed signs of stabilization, reduced profitability for Carbon Materials and Chemicals (CMC) combined with pre-tax charges of $3.7 million related to the Osmose integration and $3.4 million of additional interest expense negatively impacted adjusted third quarter 2014 results compared to the prior year quarter.
Commenting on the quarter, Walt Turner, president and CEO of Koppers, said, "Our North American railroad business showed marked progress. We are seeing significant improvements in hardwood lumber availability resulting in higher sales and profits. Our global CMC business continues to operate against industry headwinds and remains challenged due to lower demand in specific regions. Our third quarter was consistent with the past two quarters with reduced sales prices and volumes compared to the prior year. Our actions to rationalize capacity in Europe have begun to show positive results, and we are awaiting approval from various state agencies that could lead us to take similar steps in North America. A consolidation of our U.S. facilities would enable us to streamline our distillation operations and logistics and improve our capacity utilization."
Mr. Turner continued, "As previously announced, we closed the Osmose transaction on August 15. This acquisition represents another important step in our long-term growth strategy by expanding our performance chemicals offering and extending our existing railroad products and services platform. The addition of Osmose further diversifies our business and positions us for future growth. The synergies from the acquisition which include cost reductions and revenue increases are expected to be at least $12 million, and we anticipate this annual run rate will be realizable by the end of 2015."
Koppers, with corporate headquarters in Pittsburgh, Pennsylvania, is an
integrated global producer of carbon compounds, specialty chemicals, and
treated wood products and services for the aluminum, railroad,
specialty chemical, utility, rubber, concrete, steel, residential
lumber, and agriculture industries.