PITTSBURGH, June 12, 2019 /PRNewswire/ -- Koppers Inc., a
wholly-owned subsidiary of Koppers Holdings Inc. (NYSE:
KOP), today announced that it plans to cease remaining
production activities at its facility located in Follansbee, West Virginia.
As part of Koppers previously announced strategy to restructure
and streamline the operating footprint of its Carbon Materials and
Chemicals (CMC) business, the company had discontinued coal tar
distillation processing at the Follansbee facility in 2016. Subsequent
to the commissioning of a new naphthalene refining plant in
Stickney, Illinois, the company
ceased naphthalene refining activities at the Follansbee facility in the fourth quarter of
2018. This final development, which will ultimately affect 48
employees, is driven by market conditions over the past decade that
resulted in lower overall supply of raw material
from North American steel manufacturers and the long-term changing
footprint of the aluminum sector in the United States. The
company expects to ramp down production over the next few months
with plant decommissioning and tank cleaning activities to be
completed by the fourth quarter of 2020. The closure of
Follansbee represents the final
step in reducing the CMC global footprint of facilities from 11 to
four.
The company anticipates that this action will result in pre-tax
charges to earnings of $4 million to
$6 million in the second quarter
related to asset write-downs and site clean-up while future cash
requirements to close the facility are approximately $20 million. Both the value of charges and
cash requirements are consistent with disclosures made in the
company's Quarterly Report on Form 10-Q filed on May 3, 2019. The closure will be funded
through cash savings from winding down operations at the site which
is estimated at $4 million in 2019,
$9 million in 2020, and $16 million in 2021 and thereafter.
Commenting on the decision, Koppers President and CEO,
Leroy Ball said, "The closure of our
Follansbee facility is an
unfavorable outcome of the effects of global forces on our business
that were outside of our control. We made several attempts to
utilize the site for other purposes in an effort to preserve jobs,
but ultimately could not arrive at a solution that worked from an
economic standpoint."
Mr. Ball continued, "I want to thank our dedicated employees who
have continued to work hard under less than ideal circumstances
over the past several years. I take seriously the fact that
closing the facility may have a potential negative impact on our
employees and their families. As a result, we plan to provide
assistance to employees in a way that helps position them for
ongoing success as they transition to their next employer."
About Koppers
Koppers, with corporate headquarters in
Pittsburgh, Pennsylvania, is an
integrated global provider of treated wood products, wood treatment
chemicals and carbon compounds. Our products and services are
used in a variety of niche applications in a diverse range of
end-markets, including the railroad, specialty chemical, utility,
residential lumber, agriculture, aluminum, steel, rubber, and
construction industries. Including our joint ventures, we
serve our customers through a comprehensive global manufacturing
and distribution network, with facilities located in North America, South
America, Australasia, China
and Europe. The stock of Koppers Holdings Inc. is publicly
traded on the New York Stock Exchange under the symbol "KOP."
For more information, visit us on the Web: www.koppers.com.
Questions concerning investor relations should be directed to
Michael J. Zugay at 412 227 2231 or
Quynh McGuire at 412 227 2049.
Safe Harbor Statement
Certain statements in this press
release are "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995 and may include,
but are not limited to, statements about sales levels,
acquisitions, restructuring, declines in the value of Koppers
assets and the effect of any resulting impairment charges,
profitability and anticipated expenses and cash outflows. All
forward-looking statements involve risks and uncertainties. All
statements contained herein that are not clearly historical in
nature are forward-looking, and words such as "outlook,"
"guidance," "forecast," "believe," "anticipate," "expect,"
"estimate," "may," "will," "should," "continue," "plan,"
"potential," "intend," "likely," or other similar words or phrases
are generally intended to identify forward-looking
statements. Any forward-looking statement contained herein,
in other press releases, written statements or other documents
filed with the Securities and Exchange Commission, or in Koppers
communications and discussions with investors and analysts in the
normal course of business through meetings, phone calls and
conference calls, regarding expectations with respect to sales,
earnings, cash flows, operating efficiencies, restructurings, the
benefits of acquisitions, divestitures, joint ventures or other
matters as well as financings and debt reduction, are subject to
known and unknown risks, uncertainties and contingencies.
Many of these risks, uncertainties and contingencies are beyond our
control, and may cause actual results, performance or achievements
to differ materially from anticipated results, performance or
achievements. Factors that might affect such forward-looking
statements include, among other things, the impact of changes in
commodity prices, such as oil and copper, on product margins;
general economic and business conditions; potential difficulties in
protecting our intellectual property; the ratings on our debt and
our ability to repay or refinance our outstanding indebtedness as
it matures; our ability to operate within the limitations of our
debt covenants; potential impairment of our goodwill and/or
long-lived assets; demand for Koppers goods and services;
competitive conditions; interest rate and foreign currency rate
fluctuations; availability and costs of key raw materials;
unfavorable resolution of claims against us, as well as those
discussed more fully elsewhere in this release and in documents
filed with the Securities and Exchange Commission by Koppers,
particularly our latest annual report on Form 10-K and quarterly
report on Form 10-Q. Any forward-looking statements in this
release speak only as of the date of this release, and we undertake
no obligation to update any forward-looking statement to reflect
events or circumstances after that date or to reflect the
occurrence of unanticipated events.
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For Information:
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Michael J. Zugay,
Chief Financial Officer and Treasurer
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412 227
2231
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ZugayMJ@koppers.com
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SOURCE Koppers Holdings Inc.