PITTSBURGH, Aug. 8, 2019 /PRNewswire/ -- Koppers
Holdings Inc. (NYSE: KOP), an integrated global provider of treated
wood products, wood treatment chemicals and carbon compounds, today
reported net income attributable to Koppers for the second quarter
of $14.7 million, or $0.70 per diluted share compared to net income of
$0.6 million, or $0.03 per diluted share in the prior year
quarter.
Adjusted net income and adjusted earnings per share (EPS)
were $24.5 million and $1.16 per share for the second quarter of 2019,
compared to $20.5 million and
$0.93 per share in the prior year
quarter, respectively. Net income and earnings per share,
reported and adjusted, benefited from higher profitability
generated by the company's wood-preservation businesses as well as
lower overall selling, general and administrative
expenses.
Adjustments to pre-tax income totaled $13.0 million for the second quarter of 2019 and
$20.2 million for the second quarter
of 2018. For both periods, these items primarily reflected
restructuring expenses, non-cash LIFO expense and non-cash
adjustments related to mark-to-market commodity hedging. The
prior year period also included purchase accounting adjustments and
closing costs related to the acquisition of Cox Industries,
Inc.
Consolidated sales were $469.8
million for the second quarter of 2019, an increase of
$33.8 million, or 7.8 percent, from
sales of $436.0 million in the prior
year quarter. This represented a record sales quarter, driven
by continued demand in various end markets for wood-preservation
products and services. Excluding a negative impact from
foreign currency translation of $6.5
million, sales were higher by $40.3
million or 9.3 percent.
The Railroad and Utility Products and Services (RUPS)
favorable performance reflects improved capacity utilization from
increased treating volumes, a strong commercial market driving
improved pricing, and overall higher demand from both Class I and
commercial customers for railroad related products and
services. Also, treating volumes in the prior year period
were impacted by some customers shifting from a treatment-service
only model to purchasing fully treated crossties. The
Performance Chemicals (PC) business results benefited from higher
sales and a favorable product mix, partially offset by
higher raw material costs. The Carbon Materials
and Chemicals (CMC) segment reported higher year-over-year sales
and profitability, which reflects the benefits of permanent cost
savings from its restructuring initiatives.
Commenting on the quarter, President and CEO Leroy Ball said, "After a healthy start to the
year, the second quarter further proved that our overall business
is on solid ground with plenty of opportunity for upside.
Crosstie demand increased as expected and improved conditions
enabled higher levels of untreated tie procurement, both of which
helped the performance of our RUPS business tremendously. In
our PC business, customer demand for key products was stronger,
which more than mitigated the persistent cost headwinds that we
have dealt with during the past 18 months. The CMC segment
managed to post favorable quarterly results despite a mixed
economic environment in certain regions and minimal earnings
contribution from China. In summary, we delivered one of the
best quarters in our company's history, even though we have yet to
realize the full potential of each of our businesses."
Second-Quarter Financial Performance
- Sales for RUPS of $199.1
million increased by $21.9
million, or 12.4 percent, compared to sales of $177.2 million in the prior year quarter.
The sales increase was primarily due to higher
procurement levels of untreated ties and
volume increases in both the Class I and commercial crosstie
markets, compared with lower demand for crossties in the prior
year, given decreased spending in the rail industry, particularly
the Class I market. In the utility pole markets, overall customer
demand showed year-over-year improvement. Operating
profit for the second quarter was $11.8
million, or 5.9 percent, compared with an operating
loss of $1.0 million, or 0.6 percent,
in the prior year quarter. Adjusted EBITDA for the second quarter
was $18.9 million, or 9.5 percent,
compared with $13.9 million, or 7.8
percent, in the prior year quarter. The current quarter performance
reflects significant margin expansion due to improved operational
efficiencies from higher production utilization and
lower selling, general and administrative
expenses.
- Sales for PC of $120.8
million increased by $5.7 million, or 5.0 percent, compared to sales
of $115.1 million in the prior year
quarter. The sales increase was due primarily to
higher volumes of copper-based preservatives in North America, new product sales, and a more
favorable pricing mix. Operating profit was
$14.0 million, or 11.6 percent, for
the second quarter, compared with $11.6
million, or 10.1 percent, in the prior year quarter.
Adjusted EBITDA was $21.0 million, or
17.4 percent, for the second quarter, compared with $17.9 million, or 15.6 percent, in the prior year
quarter. The higher year-over-year profitability was driven by
higher sales, favorable pricing mix, improved cost efficiencies,
and insurance proceeds received which, collectively, more than
offset higher raw material prices.
- Sales for CMC totaling $149.9
million increased by $6.2
million, or 4.3 percent, compared to sales of $143.7 million in the prior year quarter.
Excluding an unfavorable impact from foreign currency translation
of $5.7 million, sales increased by
$11.9 million, or 8.3 percent, from
the prior year quarter. The increase was due mainly to
higher sales volumes for pitch in China and Europe, higher prices for carbon pitch in
Australia, and higher sales
volumes of phthalic anhydride in North
America. Operating profit was $13.3 million, or 8.9 percent, in the second
quarter, compared with $12.5 million,
or 8.7 percent, in the prior year quarter. Adjusted EBITDA was
$25.0 million, or 16.7 percent in the
second quarter, compared with $23.1
million, or 16.1 percent in the prior year quarter. The
favorable year-over-year results were primarily driven by permanent
savings from a more streamlined and efficient cost
structure, partially offset by pricing pressure in
certain regions.
- Operating profit was $38.5
million, or 8.2 percent, compared with $22.3 million, or 5.1 percent, in the prior year
quarter. Adjusted EBITDA was $64.5
million—a second-quarter record, or 13.7 percent, compared with
$55.3 million, or 12.7 percent, in
the prior year quarter, due to higher profitability in all business
segments, particularly in the company's wood-based businesses, RUPS
and PC. Operating profit margin and adjusted EBITDA margin are
calculated as a percentage of GAAP sales.
- Net income attributable to Koppers in the second quarter
was $14.7 million, compared with net
income of $0.6 million in the prior
year quarter. Adjusted net income was $24.5
million, compared with $20.5
million in the prior year quarter.
- In the second quarter of 2019, items excluded from
adjusted EBITDA consisted of $11.8
million of pre-tax charges, while adjusted net income and
adjusted EPS for the quarter excluded $13.0
million of pre-tax charges. Both adjustments consisted of
restructuring expenses, non-cash LIFO expense, and non-cash
adjustments related to mark-to-market commodity
hedging.
- Diluted EPS was $0.70,
compared with $0.03 per share in the
prior year quarter. Adjusted EPS for the quarter was $1.16, compared with $0.93 for the prior year period.
- Capital expenditures for the six months ended
June 30, 2019, were $18.6 million, compared with $53.6 million for the prior year period. The
current year amount represents general spending to maintain the
safety and efficiency of global operations.
- At June 30, 2019, total
debt was approximately $1.0 billion
and, net of cash and cash equivalents, net debt was $965.1 million, compared with total debt of
$990.4 million and, net of cash and
cash equivalents, net debt of $949.8
million at December 31, 2018.
By comparison, the net debt was higher by $15.3 million, primarily due to typical
first-half working capital increases. At June 30, 2019, the company's net leverage ratio
was 4.6, a decrease from 4.8 at March 31,
2019.
Agreement to Sell Property and Assets at Blackstone, Virginia
On
August 5, 2019 Koppers closed on the
sale of its utility pole treating operations in Blackstone, Virginia. In exchange for
the property and associated assets, the buyer will assume all
historical environmental obligations as well as extend its
agreement to purchase wood-treatment chemicals from Koppers for a
one-year period.
Commenting on the transaction, Mr. Ball said, "The sale of
Blackstone was a logical
first-step in consolidating capacity as we have two other treating
facilities in Virginia within a
130-mile radius. We do not need to make any additional
capacity investments at our other existing facilities to handle the
redirected product volume. The sale is expected to result in
approximately $1 million of savings
on an annualized basis."
Update on Koppers (Jiangsu) Carbon Chemical Company
Limited
Koppers (Jiangsu) Carbon Chemical Company
Limited (KJCC), the company's 75 percent-owned subsidiary,
remains in dispute with its largest customer in China over a disagreement on the application
of contractual pricing terms. The company continues to engage
in discussions with this customer and hopes to resolve the
disagreement in accordance with certain provisions in the
contract. Koppers has not recognized any incremental revenues
associated with the higher pricing.
Commenting on the situation, Mr. Ball said, "It is
unfortunate that we haven't reached a resolution on the monies we
believe we are owed, but we will continue to push for a solution
that assures the best outcome for Koppers and our
shareholders. We will continue to supply our customer product
under temporary purchase orders in the interim. The temporary
agreements, while less than what we believe we are contractually
entitled to, still provide a return on our investment. By the
end of 2019, we expect to be debt-free in China, as the cash generated from our KJCC
operations will have fully paid off our $56
million construction loan balance as of December 2014."
2019 Outlook
Koppers is tightening
its top-line forecast for 2019, forecasting that sales will be
approximately $1.8 billion, based
upon a full year's sales from the acquisitions made in 2018, and an
overall stronger demand environment in the company's wood-based
technology related businesses.
On an adjusted basis, Koppers is increasing the lower end
of the range of its EBITDA forecast to $214
million to $224 million for
2019, compared with approximately $222
million in the prior year. The company is anticipating
higher year-over-year interest expenses, along with depreciation
and amortization costs in 2019. Accordingly, the 2019
adjusted EPS is forecasted to be in the range of $3.27 to $3.61,
compared with $3.50 in the prior
year. The projected effective tax rate in 2019 will be
approximately 29 percent.
Based on a capital expenditure plan of $140 million over a two-year period that began in
2018, $30 million of capital
investments, net of insurance proceeds, are forecast to occur in
2019. Gross capital spending was $18.6
million in the first half of 2019. Net of insurance
proceeds of $3 million, capital
spending was $15.6 million for the
year-to-date period ending June 30,
2019, and trending toward the expected $30 million run rate for the year.
The pro-forma net debt to adjusted EBITDA ratio is
projected to be in the range of 3.8x to 4.1x at December 31, 2019. The company continues to
focus on debt repayment and plans to reduce debt by a minimum of
$80 million in 2019.
Commenting on the forecast, Mr. Ball said,
"We continue to have a positive story to tell, starting with
our strong first-half performance, which keeps us squarely on track
to meet or exceed our financial goals for 2019. Strong
profitability from our wood preservative and treated wood product
markets should continue to drive performance in the second half of
2019. That will continue to be augmented by the benefits
generated from our various market penetration and cost reduction
strategies. We remain on target to generate $20 million to $25
million of benefits in 2019, driven by savings from the new
naphthalene unit at our Stickney,
Illinois, facility as well as actions related to network
optimization, commercial development, raw materials, and other cost
savings. Beyond 2019, we see another $15 million to $30
million of annualized benefits to be achieved ratably
through 2023, which will help to provide a buffer against a
downturn in any of our markets."
Mr. Ball continued, "We should see operating cash flows
improve in the second half of the year as typically occurs and in
turn, this will allow us to focus on our near-term priority of
reducing leverage and risk, which we believe will have a strong
impact on improving total shareholder return. I believe that
our technological strength, market breadth, and focused efforts to
serve diverse markets with our unique integrated business model
built around wood preservation technologies will continue to carry
the day and provide for success well into the future."
Koppers does not provide reconciliations of guidance for
adjusted EBITDA and adjusted EPS to comparable GAAP measures, in
reliance on the unreasonable efforts exception. Koppers is
unable, without unreasonable efforts, to forecast certain items
required to develop meaningful comparable GAAP financial
measures. These items include restructuring, impairment,
non-cash LIFO charges, acquisition-related costs, and non-cash
mark-to-market commodity hedging that are difficult to predict in
advance in order to include in a GAAP estimate and may be
significant.
Investor Conference Call and
Webcast
Koppers management will conduct a
conference call this morning, beginning at 11:00 a.m. Eastern Time to discuss the company's
performance. Presentation materials will be available at
least 15 minutes before the call on www.koppers.com in
the Investor Relations section of the company's website.
Interested parties may access the live audio broadcast by
dialing 833-366-1128 in the United
States/Canada, or
412-902-6774 for international, Conference ID number 10133919.
Participants are requested to access the call at least five minutes
before the scheduled start time to complete a brief
registration.
The conference call will be broadcast live online at:
https://services.choruscall.com/links/koppers190808.html. (Due to
the length of this URL, it may be necessary to copy and paste this
hyperlink into your internet browser's URL address
field.)
An audio replay will be available approximately two hours
after the completion of the call at 877-344-7529 for U.S. toll
free, 855-669-9658 for Canada toll
free, or 412-317-0088 for international, Conference ID number
10133919. The recording will be available for replay through
September 9, 2019.
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.
Non-GAAP Financial Measures
This
press release contains certain non-GAAP financial measures.
Koppers believes that adjusted EBITDA, adjusted EBITDA margin,
adjusted net income, adjusted earnings per share, net debt and net
leverage ratio provide information useful to investors in
understanding the underlying operational performance of the
company, its business and performance trends, and facilitate
comparisons between periods and with other corporations in similar
industries. The exclusion of certain items permits evaluation
and a comparison of results for ongoing business operations, and it
is on this basis that Koppers management internally assesses the
company's performance. In addition, the Board of Directors
and executive management team use adjusted EBITDA as a performance
measure under the company's annual incentive plans.
Although Koppers believes that these non-GAAP financial
measures enhance investors' understanding of its business and
performance, these non-GAAP financial measures should not be
considered an alternative to GAAP basis financial measures and
should be read in conjunction with the relevant GAAP financial
measure. Other companies in a similar industry may define or
calculate these measures differently than the company, limiting
their usefulness as comparative measures. Because of these
limitations, these non-GAAP financial measures should not be
considered in isolation or as substitutes for performance measures
calculated in accordance with GAAP.
See the attached tables for the following reconciliations
of non-GAAP financial measures included in this press
release: Unaudited Reconciliation of Operating Profit to
EBITDA and Adjusted EBITDA; Unaudited Reconciliation of Net Income
to EBITDA and Adjusted EBITDA; Unaudited Reconciliation of Net
Income Attributable to Koppers and Adjusted Net Income; Unaudited
Reconciliation of Diluted Earnings Per Share and Adjusted Earnings
Per Share; Unaudited Reconciliation of Total Debt to Net Debt and
Net Leverage Ratio; and Unaudited Reconciliation of Net Income to
EBITDA and Adjusted EBITDA on a Latest Twelve Month
Basis.
For the company's guidance, adjusted EBITDA and adjusted
EPS excludes restructuring, impairment, non-cash LIFO charges,
acquisition-related costs, and non-cash mark-to-market commodity
hedging. As described above, the forecast amounts for these
items cannot be reasonably estimated due to their nature, but may
be significant. For that reason, the company is unable to
provide GAAP estimates at this time.
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.
Koppers Holdings Inc.
|
Unaudited Consolidated Statement of
Operations
|
(Dollars in millions, except per share
amounts)
|
|
|
|
Three Months Ended June 30,
|
|
|
Six Months Ended June 30,
|
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
Net sales
|
|
$
|
469.8
|
|
|
$
|
436.0
|
|
|
$
|
904.7
|
|
|
$
|
842.1
|
|
Cost of
sales
|
|
|
375.6
|
|
|
|
352.8
|
|
|
|
729.4
|
|
|
|
664.2
|
|
Depreciation and
amortization
|
|
|
13.4
|
|
|
|
13.7
|
|
|
|
28.0
|
|
|
|
25.5
|
|
Impairment and
restructuring charges
|
|
|
3.8
|
|
|
|
1.4
|
|
|
|
4.1
|
|
|
|
2.9
|
|
Selling, general and
administrative expenses
|
|
|
38.5
|
|
|
|
45.8
|
|
|
|
76.3
|
|
|
|
83.9
|
|
Operating
profit
|
|
|
38.5
|
|
|
|
22.3
|
|
|
|
66.9
|
|
|
|
65.6
|
|
Other (loss) income,
net
|
|
|
(0.1)
|
|
|
|
(0.7)
|
|
|
|
0.5
|
|
|
|
(0.5)
|
|
Interest
expense
|
|
|
16.0
|
|
|
|
14.5
|
|
|
|
32.7
|
|
|
|
25.0
|
|
Income before income
taxes
|
|
|
22.4
|
|
|
|
7.1
|
|
|
|
34.7
|
|
|
|
40.1
|
|
Income tax
provision
|
|
|
8.0
|
|
|
|
6.6
|
|
|
|
7.9
|
|
|
|
15.8
|
|
Income from
continuing operations
|
|
|
14.4
|
|
|
|
0.5
|
|
|
|
26.8
|
|
|
|
24.3
|
|
Income from
discontinued operations, net of
tax
expense of $0.0, $0.3, $0.0, and $0.2
|
|
|
0.0
|
|
|
|
0.5
|
|
|
|
0.0
|
|
|
|
0.4
|
|
Net income
|
|
|
14.4
|
|
|
|
1.0
|
|
|
|
26.8
|
|
|
|
24.7
|
|
Net (loss) income
attributable to noncontrolling
interests
|
|
|
(0.3)
|
|
|
|
0.4
|
|
|
|
0.6
|
|
|
|
6.3
|
|
Net income
attributable to Koppers
|
|
$
|
14.7
|
|
|
$
|
0.6
|
|
|
$
|
26.2
|
|
|
$
|
18.4
|
|
Earnings per common
share attributable to
Koppers
common shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic -
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$
|
0.71
|
|
|
$
|
0.01
|
|
|
$
|
1.27
|
|
|
$
|
0.86
|
|
Discontinued
operations
|
|
|
0.00
|
|
|
|
0.02
|
|
|
|
0.00
|
|
|
|
0.02
|
|
Earnings per basic
common share
|
|
$
|
0.71
|
|
|
$
|
0.03
|
|
|
$
|
1.27
|
|
|
$
|
0.88
|
|
Diluted -
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$
|
0.70
|
|
|
$
|
0.01
|
|
|
$
|
1.25
|
|
|
$
|
0.81
|
|
Discontinued
operations
|
|
|
0.00
|
|
|
|
0.02
|
|
|
|
0.00
|
|
|
|
0.02
|
|
Earnings per diluted
common share
|
|
$
|
0.70
|
|
|
$
|
0.03
|
|
|
$
|
1.25
|
|
|
$
|
0.83
|
|
Comprehensive income
(loss)
|
|
$
|
9.6
|
|
|
$
|
(20.7)
|
|
|
$
|
30.3
|
|
|
$
|
(4.5)
|
|
Comprehensive (loss)
income attributable to
noncontrolling interests
|
|
|
(0.6)
|
|
|
|
(0.3)
|
|
|
|
0.6
|
|
|
|
5.8
|
|
Comprehensive income
(loss) attributable to
Koppers
|
|
$
|
10.2
|
|
|
$
|
(20.4)
|
|
|
$
|
29.7
|
|
|
$
|
(10.3)
|
|
Weighted average
shares outstanding (in
thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
20,662
|
|
|
|
21,138
|
|
|
|
20,619
|
|
|
|
21,016
|
|
Diluted
|
|
|
21,044
|
|
|
|
22,054
|
|
|
|
20,949
|
|
|
|
22,092
|
|
Koppers Holdings Inc.
|
Unaudited Consolidated Balance
Sheet
|
(Dollars in millions, except per share
amounts)
|
|
|
|
June 30,
2019
|
|
|
December 31,
2018
|
|
Assets
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
42.1
|
|
|
$
|
40.6
|
|
Accounts receivable,
net of allowance of $2.0 and $2.5
|
|
|
212.8
|
|
|
|
186.7
|
|
Income tax
receivable
|
|
|
1.8
|
|
|
|
2.8
|
|
Inventories,
net
|
|
|
279.2
|
|
|
|
284.7
|
|
Other current
assets
|
|
|
21.5
|
|
|
|
25.5
|
|
Total current
assets
|
|
|
557.4
|
|
|
|
540.3
|
|
Property, plant and
equipment, net
|
|
|
414.4
|
|
|
|
417.9
|
|
Operating lease
right-of-use assets
|
|
|
113.9
|
|
|
|
0.0
|
|
Goodwill
|
|
|
296.2
|
|
|
|
296.5
|
|
Intangible assets,
net
|
|
|
178.1
|
|
|
|
188.0
|
|
Deferred tax
assets
|
|
|
14.3
|
|
|
|
15.5
|
|
Other
assets
|
|
|
23.8
|
|
|
|
21.7
|
|
Total
assets
|
|
$
|
1,598.1
|
|
|
$
|
1,479.9
|
|
Liabilities
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
142.1
|
|
|
$
|
177.2
|
|
Accrued
liabilities
|
|
|
98.9
|
|
|
|
109.9
|
|
Current operating
lease liabilities
|
|
|
22.0
|
|
|
|
0.0
|
|
Current maturities of
long-term debt
|
|
|
14.0
|
|
|
|
11.6
|
|
Total current
liabilities
|
|
|
277.0
|
|
|
|
298.7
|
|
Long-term
debt
|
|
|
993.2
|
|
|
|
978.8
|
|
Accrued
postretirement benefits
|
|
|
48.6
|
|
|
|
48.2
|
|
Deferred tax
liabilities
|
|
|
6.9
|
|
|
|
6.8
|
|
Operating lease
liabilities
|
|
|
92.7
|
|
|
|
0.0
|
|
Other long-term
liabilities
|
|
|
76.7
|
|
|
|
80.4
|
|
Total
liabilities
|
|
|
1,495.1
|
|
|
|
1,412.9
|
|
Commitments and
contingent liabilities
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
Senior Convertible
Preferred Stock, $0.01 par value per share;
10,000,000 shares authorized; no shares issued
|
|
|
0.0
|
|
|
|
0.0
|
|
Common Stock, $0.01
par value per share; 80,000,000 shares
authorized; 23,196,584 and 23,028,957 shares issued
|
|
|
0.2
|
|
|
|
0.2
|
|
Additional paid-in
capital
|
|
|
212.4
|
|
|
|
206.0
|
|
Retained
earnings
|
|
|
53.5
|
|
|
|
27.2
|
|
Accumulated other
comprehensive loss
|
|
|
(83.7)
|
|
|
|
(87.2)
|
|
Treasury stock, at
cost, 2,513,568 and 2,480,213 shares
|
|
|
(90.8)
|
|
|
|
(90.0)
|
|
Total Koppers
shareholders'equity
|
|
|
91.6
|
|
|
|
56.2
|
|
Noncontrolling
interests
|
|
|
11.4
|
|
|
|
10.8
|
|
Total
equity
|
|
|
103.0
|
|
|
|
67.0
|
|
Total liabilities and
equity
|
|
$
|
1,598.1
|
|
|
$
|
1,479.9
|
|
Koppers Holdings Inc.
|
Unaudited Consolidated Statement of Cash
Flows
|
(Dollars in millions)
|
|
|
|
Six Months Ended June 30,
|
|
|
|
2019
|
|
|
2018
|
|
Cash provided by
(used in) operating activities:
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
26.8
|
|
|
$
|
24.7
|
|
Adjustments to
reconcile net cash provided by (used in) operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
28.0
|
|
|
|
25.5
|
|
Loss on disposal of
assets and investment
|
|
|
0.3
|
|
|
|
1.3
|
|
Insurance
proceeds
|
|
|
(3.0)
|
|
|
|
(0.7)
|
|
Deferred income
taxes
|
|
|
0.4
|
|
|
|
4.4
|
|
Change in other
liabilities
|
|
|
(6.6)
|
|
|
|
(3.7)
|
|
Non-cash interest
expense
|
|
|
1.2
|
|
|
|
1.2
|
|
Stock-based
compensation
|
|
|
5.9
|
|
|
|
6.0
|
|
Other - net
|
|
|
(0.1)
|
|
|
|
5.4
|
|
Changes in working
capital:
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
(25.4)
|
|
|
|
(29.4)
|
|
Inventories
|
|
|
5.9
|
|
|
|
(26.1)
|
|
Accounts
payable
|
|
|
(30.5)
|
|
|
|
23.0
|
|
Accrued
liabilities
|
|
|
(6.0)
|
|
|
|
(29.0)
|
|
Other working
capital
|
|
|
4.5
|
|
|
|
0.5
|
|
Net cash provided by
operating activities
|
|
|
1.4
|
|
|
|
3.1
|
|
Cash (used in)
provided by investing activities:
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
|
(18.5)
|
|
|
|
(53.6)
|
|
Acquisitions, net of
cash acquired
|
|
|
0.0
|
|
|
|
(264.1)
|
|
Insurance proceeds
received
|
|
|
3.0
|
|
|
|
0.7
|
|
Net cash provided by
divestitures and asset sales
|
|
|
0.5
|
|
|
|
1.5
|
|
Net cash used in
investing activities
|
|
|
(15.0)
|
|
|
|
(315.5)
|
|
Cash provided by
(used in) financing activities:
|
|
|
|
|
|
|
|
|
Net increase in credit
facility borrowings
|
|
|
35.0
|
|
|
|
235.1
|
|
Borrowings of
long-term debt
|
|
|
0.0
|
|
|
|
100.0
|
|
Repayments of
long-term debt
|
|
|
(18.7)
|
|
|
|
(10.4)
|
|
Issuances of Common
Stock
|
|
|
0.6
|
|
|
|
2.2
|
|
Repurchases of Common
Stock
|
|
|
(0.9)
|
|
|
|
(7.4)
|
|
Payment of debt
issuance costs
|
|
|
(0.9)
|
|
|
|
(2.9)
|
|
Net cash provided by
financing activities
|
|
|
15.1
|
|
|
|
316.6
|
|
Effect of exchange
rate changes on cash
|
|
|
0.0
|
|
|
|
(2.0)
|
|
Net increase in cash
and cash equivalents
|
|
|
1.5
|
|
|
|
2.2
|
|
Cash and cash
equivalents at beginning of period
|
|
|
40.6
|
|
|
|
60.3
|
|
Cash and cash
equivalents at end of period
|
|
$
|
42.1
|
|
|
$
|
62.5
|
|
Cash paid for amounts
included in the measurement of lease liabilities:
|
|
|
|
|
|
|
|
|
Operating cash outflow
from operating leases
|
|
$
|
7.7
|
|
|
|
|
|
Supplemental
disclosure of non-cash investing and financing
activities:
|
|
|
|
|
|
|
|
|
Right-of-use assets
obtained in exchange for new operating lease
liabilities
|
|
$
|
16.5
|
|
|
|
|
|
Unaudited Segment Information
|
|
The following tables
set forth certain sales and operating data, net of all intersegment
transactions, for the company's businesses for the periods
indicated.
|
|
|
|
Three Months Ended June 30,
|
|
|
Six Months Ended June 30,
|
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
(Dollars in millions)
|
|
|
|
Net sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Railroad and Utility
Products and Services
|
|
$
|
199.1
|
|
|
$
|
177.2
|
|
|
$
|
365.2
|
|
|
$
|
285.6
|
|
Performance
Chemicals
|
|
|
120.8
|
|
|
|
115.1
|
|
|
|
219.8
|
|
|
|
212.5
|
|
Carbon Materials and
Chemicals
|
|
|
149.9
|
|
|
|
143.7
|
|
|
|
319.7
|
|
|
|
344.0
|
|
Total
|
|
$
|
469.8
|
|
|
$
|
436.0
|
|
|
$
|
904.7
|
|
|
$
|
842.1
|
|
Operating profit
(loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Railroad and Utility
Products and Services
|
|
$
|
11.8
|
|
|
$
|
(1.0)
|
|
|
$
|
20.5
|
|
|
$
|
0.1
|
|
Performance
Chemicals
|
|
|
14.0
|
|
|
|
11.6
|
|
|
|
26.8
|
|
|
|
17.2
|
|
Carbon Materials and
Chemicals
|
|
|
13.3
|
|
|
|
12.5
|
|
|
|
20.7
|
|
|
|
49.7
|
|
Corporate
Unallocated
|
|
|
(0.6)
|
|
|
|
(0.8)
|
|
|
|
(1.1)
|
|
|
|
(1.4)
|
|
Total
|
|
$
|
38.5
|
|
|
$
|
22.3
|
|
|
$
|
66.9
|
|
|
$
|
65.6
|
|
Operating profit
margin:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Railroad and Utility
Products and Services
|
|
|
5.9
|
%
|
|
|
-0.6
|
%
|
|
|
5.6
|
%
|
|
|
0.0
|
%
|
Performance
Chemicals
|
|
|
11.6
|
%
|
|
|
10.1
|
%
|
|
|
12.2
|
%
|
|
|
8.1
|
%
|
Carbon Materials and
Chemicals
|
|
|
8.9
|
%
|
|
|
8.7
|
%
|
|
|
6.5
|
%
|
|
|
14.4
|
%
|
Total
|
|
|
8.2
|
%
|
|
|
5.1
|
%
|
|
|
7.4
|
%
|
|
|
7.8
|
%
|
Depreciation and
amortization:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Railroad and Utility
Products and Services
|
|
$
|
4.8
|
|
|
$
|
4.9
|
|
|
$
|
9.6
|
|
|
$
|
7.9
|
|
Performance
Chemicals
|
|
|
4.6
|
|
|
|
4.5
|
|
|
|
9.5
|
|
|
|
8.9
|
|
Carbon Materials and
Chemicals
|
|
|
4.0
|
|
|
|
4.3
|
|
|
|
8.9
|
|
|
|
8.7
|
|
Total
|
|
$
|
13.4
|
|
|
$
|
13.7
|
|
|
$
|
28.0
|
|
|
$
|
25.5
|
|
Adjusted
EBITDA(1):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Railroad and Utility
Products and Services
|
|
$
|
18.9
|
|
|
$
|
13.9
|
|
|
$
|
33.2
|
|
|
$
|
19.3
|
|
Performance
Chemicals
|
|
|
21.0
|
|
|
|
17.9
|
|
|
|
36.4
|
|
|
|
31.7
|
|
Carbon Materials and
Chemicals
|
|
|
25.0
|
|
|
|
23.1
|
|
|
|
41.7
|
|
|
|
70.3
|
|
Corporate
Unallocated
|
|
|
(0.4)
|
|
|
|
0.4
|
|
|
|
(0.7)
|
|
|
|
0.2
|
|
Total
|
|
$
|
64.5
|
|
|
$
|
55.3
|
|
|
$
|
110.6
|
|
|
$
|
121.5
|
|
Adjusted EBITDA
margin(2):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Railroad and
Utility Products and Services
|
|
|
9.5
|
%
|
|
|
7.8
|
%
|
|
|
9.1
|
%
|
|
|
6.8
|
%
|
Performance
Chemicals
|
|
|
17.4
|
%
|
|
|
15.6
|
%
|
|
|
16.6
|
%
|
|
|
14.9
|
%
|
Carbon Materials and
Chemicals
|
|
|
16.7
|
%
|
|
|
16.1
|
%
|
|
|
13.0
|
%
|
|
|
20.4
|
%
|
Total
|
|
|
13.7
|
%
|
|
|
12.7
|
%
|
|
|
12.2
|
%
|
|
|
14.4
|
%
|
|
|
(1)
|
The tables below
describe the adjustments to EBITDA for the three and six months
ended June 30, 2019 and 2018, respectively.
|
(2)
|
Adjusted EBITDA as a
percentage of GAAP sales.
|
UNAUDITED RECONCILIATION OF OPERATING PROFIT TO
EBITDA AND ADJUSTED EBITDA*
|
(In millions)
|
|
|
|
Three months ended June 30,2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate
|
|
|
|
|
|
|
|
RUPS
|
|
|
PC
|
|
|
CMC
|
|
|
Unallocated
|
|
|
Consolidated
|
|
Operating profit
(loss)
|
|
$
|
11.8
|
|
|
$
|
14.0
|
|
|
$
|
13.3
|
|
|
$
|
(0.6)
|
|
|
$
|
38.5
|
|
Other (loss)
income
|
|
|
(0.3)
|
|
|
|
0.5
|
|
|
|
(0.4)
|
|
|
|
0.2
|
|
|
|
0.0
|
|
Depreciation and
amortization
|
|
|
4.8
|
|
|
|
4.6
|
|
|
|
4.0
|
|
|
|
0.0
|
|
|
|
13.4
|
|
Depreciation in
impairment and restructuring charges
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
0.9
|
|
|
|
0.0
|
|
|
|
0.9
|
|
EBITDA with
noncontrolling interest
|
|
$
|
16.3
|
|
|
$
|
19.1
|
|
|
$
|
17.8
|
|
|
$
|
(0.4)
|
|
|
$
|
52.8
|
|
Unusual items
impacting EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CMC
restructuring
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
6.9
|
|
|
|
0.0
|
|
|
|
6.9
|
|
RUPS treating plant
closures
|
|
|
0.2
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
0.2
|
|
Non-cash LIFO
expense
|
|
|
2.4
|
|
|
|
0.0
|
|
|
|
0.3
|
|
|
|
0.0
|
|
|
|
2.7
|
|
Mark-to-market
commodity hedging
|
|
|
0.0
|
|
|
|
1.9
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
1.9
|
|
Adjusted
EBITDA
|
|
$
|
18.9
|
|
|
$
|
21.0
|
|
|
$
|
25.0
|
|
|
$
|
(0.4)
|
|
|
$
|
64.5
|
|
Adj. EBITDA % of Consolidated Adj. EBITDA
(excluding corporate unallocated)
|
|
|
29.1
|
%
|
|
|
32.4
|
%
|
|
|
38.5
|
%
|
|
|
|
|
|
|
|
|
UNAUDITED RECONCILIATION OF OPERATING PROFIT TO
EBITDA AND ADJUSTED EBITDA*
|
(In millions)
|
|
|
|
Three months ended June 30,2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate
|
|
|
|
|
|
|
|
RUPS
|
|
|
PC
|
|
|
CMC
|
|
|
Unallocated
|
|
|
Consolidated
|
|
Operating profit
(loss)
|
|
$
|
(1.0)
|
|
|
$
|
11.6
|
|
|
$
|
12.5
|
|
|
$
|
(0.8)
|
|
|
$
|
22.3
|
|
Other income
(loss)
|
|
|
0.5
|
|
|
|
1.9
|
|
|
|
0.9
|
|
|
|
(4.0)
|
|
|
|
(0.7)
|
|
Depreciation and
amortization
|
|
|
4.9
|
|
|
|
4.5
|
|
|
|
4.3
|
|
|
|
0.0
|
|
|
|
13.7
|
|
Depreciation in
impairment and restructuring charges
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
1.3
|
|
|
|
0.0
|
|
|
|
1.3
|
|
EBITDA with
noncontrolling interest
|
|
$
|
4.4
|
|
|
$
|
18.0
|
|
|
$
|
19.0
|
|
|
$
|
(4.8)
|
|
|
$
|
36.6
|
|
Unusual items
impacting EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CMC
restructuring
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
3.6
|
|
|
|
0.0
|
|
|
|
3.6
|
|
Non-cash LIFO
expense
|
|
|
2.5
|
|
|
|
0.0
|
|
|
|
0.5
|
|
|
|
0.0
|
|
|
|
3.0
|
|
Mark-to-market
commodity hedging
|
|
|
0.0
|
|
|
|
1.0
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
1.0
|
|
Acquisition closing
costs
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
3.0
|
|
|
|
3.0
|
|
Sale of
land
|
|
|
0.0
|
|
|
|
(1.1)
|
|
|
|
0.0
|
|
|
|
2.2
|
|
|
|
1.1
|
|
Contract
buyout
|
|
|
1.5
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
1.5
|
|
UIP inventory purchase
accounting adjustment
|
|
|
5.5
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
5.5
|
|
Adjusted
EBITDA
|
|
$
|
13.9
|
|
|
$
|
17.9
|
|
|
$
|
23.1
|
|
|
$
|
0.4
|
|
|
$
|
55.3
|
|
Adj. EBITDA % of Consolidated Adj. EBITDA
(excluding corporate unallocated)
|
|
|
25.3
|
%
|
|
|
32.6
|
%
|
|
|
42.1
|
%
|
|
|
|
|
|
|
|
|
|
*A reconciliation of
segment net income to adjusted segment EBITDA is not available
without unreasonable efforts as we do not measure net income at the
segment level or use it as a measure of operating
performance.
|
UNAUDITED RECONCILIATION OF OPERATING PROFIT TO
EBITDA AND ADJUSTED EBITDA*
|
(In
millions)
|
|
|
|
Six Months Ended June 30,
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate
|
|
|
|
|
|
|
|
RUPS
|
|
|
PC
|
|
|
CMC
|
|
|
Unallocated
|
|
|
Consolidated
|
|
Operating profit
(loss)
|
|
$
|
20.5
|
|
|
$
|
26.8
|
|
|
$
|
20.7
|
|
|
$
|
(1.1)
|
|
|
$
|
66.9
|
|
Other
(loss) income
|
|
|
(0.5)
|
|
|
|
1.4
|
|
|
|
(0.7)
|
|
|
|
0.3
|
|
|
|
0.5
|
|
Depreciation and
amortization
|
|
|
9.6
|
|
|
|
9.5
|
|
|
|
8.9
|
|
|
|
0.0
|
|
|
|
28.0
|
|
Depreciation in
impairment and restructuring charges
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
1.2
|
|
|
|
0.0
|
|
|
|
1.2
|
|
EBITDA with
noncontrolling interest
|
|
$
|
29.6
|
|
|
$
|
37.7
|
|
|
$
|
30.1
|
|
|
$
|
(0.8)
|
|
|
$
|
96.6
|
|
Unusual items
impacting net income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CMC
restructuring
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
11.3
|
|
|
|
0.0
|
|
|
|
11.3
|
|
RUPS treating plant
closures
|
|
|
0.2
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
0.2
|
|
Non-cash LIFO
expense
|
|
|
3.4
|
|
|
|
0.0
|
|
|
|
0.3
|
|
|
|
0.0
|
|
|
|
3.7
|
|
Mark-to-market
commodity hedging
|
|
|
0.0
|
|
|
|
(1.2)
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
(1.2)
|
|
Adjusted
EBITDA
|
|
$
|
33.2
|
|
|
$
|
36.5
|
|
|
$
|
41.7
|
|
|
$
|
(0.8)
|
|
|
$
|
110.6
|
|
Adj. EBITDA % of Consolidated Adj. EBITDA
(excluding corporate unallocated)
|
|
|
29.8
|
%
|
|
|
32.8
|
%
|
|
|
37.4
|
%
|
|
|
|
|
|
|
|
|
|
*A reconciliation of
segment net income to adjusted segment EBITDA is not available
without unreasonable efforts as we do not measure net income at the
segment level or use it as a measure of operating
performance.
|
UNAUDITED RECONCILIATION OF OPERATING PROFIT TO
EBITDA AND ADJUSTED EBITDA*
|
(In millions)
|
|
|
|
Six Months Ended June 30,
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate
|
|
|
|
|
|
|
|
RUPS
|
|
|
PC
|
|
|
CMC
|
|
|
Unallocated
|
|
|
Consolidated
|
|
Operating profit
(loss)
|
|
$
|
0.1
|
|
|
$
|
17.2
|
|
|
$
|
49.7
|
|
|
$
|
(1.4)
|
|
|
$
|
65.6
|
|
Other income
(loss)
|
|
|
0.2
|
|
|
|
2.2
|
|
|
|
0.7
|
|
|
|
(3.6)
|
|
|
|
(0.5)
|
|
Depreciation and
amortization
|
|
|
7.9
|
|
|
|
8.9
|
|
|
|
8.7
|
|
|
|
0.0
|
|
|
|
25.5
|
|
Depreciation in
impairment and restructuring charges
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
2.7
|
|
|
|
0.0
|
|
|
|
2.7
|
|
EBITDA with
noncontrolling interest
|
|
$
|
8.2
|
|
|
$
|
28.3
|
|
|
$
|
61.8
|
|
|
$
|
(5.0)
|
|
|
$
|
93.3
|
|
Unusual items
impacting net income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CMC
restructuring
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
7.7
|
|
|
|
0.0
|
|
|
|
7.7
|
|
RUPS treating plant
closures
|
|
|
0.3
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
0.3
|
|
Non-cash LIFO
expense
|
|
|
3.8
|
|
|
|
0.0
|
|
|
|
0.8
|
|
|
|
0.0
|
|
|
|
4.6
|
|
Mark-to-market
commodity hedging
|
|
|
0.0
|
|
|
|
4.5
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
4.5
|
|
Acquisition closing
costs
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
3.0
|
|
|
|
3.0
|
|
Sale of
land
|
|
|
0.0
|
|
|
|
(1.1)
|
|
|
|
0.0
|
|
|
|
2.2
|
|
|
|
1.1
|
|
Contract
buyout
|
|
|
1.5
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
1.5
|
|
UIP inventory purchase
accounting adjustment
|
|
|
5.5
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
5.5
|
|
Adjusted
EBITDA
|
|
$
|
19.3
|
|
|
$
|
31.7
|
|
|
$
|
70.3
|
|
|
$
|
0.2
|
|
|
$
|
121.5
|
|
Adj. EBITDA % of Consolidated Adj. EBITDA
(excluding corporate unallocated)
|
|
|
15.9
|
%
|
|
|
26.1
|
%
|
|
|
58.0
|
%
|
|
|
|
|
|
|
|
|
|
*A reconciliation of
segment net income to adjusted segment EBITDA is not available
without unreasonable efforts as we do not measure net income at the
segment level or use it as a measure of operating
performance.
|
UNAUDITED RECONCILIATION OF NET INCOME TO EBITDA AND
ADJUSTED EBITDA
|
(In millions)
|
|
|
|
Three Months Ended June 30,
|
|
|
Six Months Ended June 30,
|
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
Net income
|
|
$
|
14.4
|
|
|
$
|
1.0
|
|
|
$
|
26.8
|
|
|
$
|
24.7
|
|
Interest
expense
|
|
|
16.0
|
|
|
|
14.5
|
|
|
|
32.7
|
|
|
|
25.0
|
|
Depreciation and
amortization
|
|
|
13.4
|
|
|
|
13.7
|
|
|
|
28.0
|
|
|
|
25.5
|
|
Depreciation in
impairment and restructuring charges
|
|
|
0.9
|
|
|
|
1.3
|
|
|
|
1.2
|
|
|
|
2.7
|
|
Income
taxes
|
|
|
8.0
|
|
|
|
6.6
|
|
|
|
7.9
|
|
|
|
15.8
|
|
Income from
discontinued operations
|
|
|
0.0
|
|
|
|
(0.5)
|
|
|
|
0.0
|
|
|
|
(0.4)
|
|
EBITDA with
noncontrolling interests
|
|
|
52.7
|
|
|
|
36.6
|
|
|
|
96.6
|
|
|
|
93.3
|
|
Unusual items
impacting net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment,
restructuring and plant closure costs
|
|
|
7.1
|
|
|
|
3.6
|
|
|
|
11.5
|
|
|
|
8.0
|
|
Mark-to-market
commodity hedging
|
|
|
2.0
|
|
|
|
1.0
|
|
|
|
(1.2)
|
|
|
|
4.5
|
|
Non-cash LIFO
expense
|
|
|
2.7
|
|
|
|
3.0
|
|
|
|
3.7
|
|
|
|
4.6
|
|
Acquisition closing
costs
|
|
|
0.0
|
|
|
|
3.0
|
|
|
|
0.0
|
|
|
|
3.0
|
|
Sale of
land
|
|
|
0.0
|
|
|
|
1.1
|
|
|
|
0.0
|
|
|
|
1.1
|
|
Contract
buyout
|
|
|
0.0
|
|
|
|
1.5
|
|
|
|
0.0
|
|
|
|
1.5
|
|
UIP inventory purchase
accounting adjustment
|
|
|
0.0
|
|
|
|
5.5
|
|
|
|
0.0
|
|
|
|
5.5
|
|
Total
adjustments
|
|
|
11.8
|
|
|
|
18.7
|
|
|
|
14.0
|
|
|
|
28.2
|
|
Adjusted
EBITDA
|
|
$
|
64.5
|
|
|
$
|
55.3
|
|
|
$
|
110.6
|
|
|
$
|
121.5
|
|
UNAUDITED RECONCILIATION OF NET INCOME ATTRIBUTABLE
TO KOPPERS AND ADJUSTED NET INCOME
|
(In millions)
|
|
|
|
Three Months Ended June 30,
|
|
|
Six Months Ended June 30,
|
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
Net income
attributable to Koppers
|
|
$
|
14.7
|
|
|
$
|
0.6
|
|
|
$
|
26.2
|
|
|
$
|
18.4
|
|
Unusual items
impacting net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment,
restructuring and plant closure costs
|
|
|
8.4
|
|
|
|
5.1
|
|
|
|
14.3
|
|
|
|
11.1
|
|
Mark-to-market
commodity hedging
|
|
|
1.9
|
|
|
|
1.0
|
|
|
|
(1.2)
|
|
|
|
4.5
|
|
Non-cash LIFO
expense
|
|
|
2.7
|
|
|
|
3.0
|
|
|
|
3.7
|
|
|
|
4.6
|
|
Acquisition closing
costs
|
|
|
0.0
|
|
|
|
3.0
|
|
|
|
0.0
|
|
|
|
3.0
|
|
Sale of
land
|
|
|
0.0
|
|
|
|
1.1
|
|
|
|
0.0
|
|
|
|
1.1
|
|
Contract
buyout
|
|
|
0.0
|
|
|
|
1.5
|
|
|
|
0.0
|
|
|
|
1.5
|
|
UIP inventory purchase
accounting adjustment
|
|
|
0.0
|
|
|
|
5.5
|
|
|
|
0.0
|
|
|
|
5.5
|
|
Total
adjustments
|
|
|
13.0
|
|
|
|
20.2
|
|
|
|
16.8
|
|
|
|
31.3
|
|
Adjustments to income
tax and noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax on
adjustments to pre-tax income
|
|
|
(3.2)
|
|
|
|
(4.7)
|
|
|
|
(5.5)
|
|
|
|
(7.5)
|
|
Income tax - U.S. Tax
Reform
|
|
|
0.0
|
|
|
|
4.9
|
|
|
|
0.0
|
|
|
|
4.9
|
|
Effect on adjusted net
income
|
|
|
9.8
|
|
|
|
20.4
|
|
|
|
11.3
|
|
|
|
28.7
|
|
Adjusted net income
including discontinued operations
|
|
|
24.5
|
|
|
|
21.0
|
|
|
|
37.5
|
|
|
|
47.1
|
|
Loss from
discontinued operations
|
|
|
0.0
|
|
|
|
(0.5)
|
|
|
|
0.0
|
|
|
|
(0.4)
|
|
Adjusted net income
attributable to Koppers
|
|
$
|
24.5
|
|
|
$
|
20.5
|
|
|
$
|
37.5
|
|
|
$
|
46.7
|
|
UNAUDITED RECONCILIATION OF DILUTED EARNINGS PER
SHARE AND
|
ADJUSTED EARNINGS PER SHARE
|
(In millions except share
amounts)
|
|
|
|
Three Months Ended June 30,
|
|
|
Six Months Ended June 30,
|
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
Net income
attributable to Koppers
|
|
$
|
14.7
|
|
|
$
|
0.6
|
|
|
$
|
26.2
|
|
|
$
|
18.4
|
|
Adjusted net income
(from above)
|
|
$
|
24.5
|
|
|
$
|
20.5
|
|
|
$
|
37.5
|
|
|
$
|
46.7
|
|
Denominator for
diluted earnings per share (in thousands)
|
|
|
21,044
|
|
|
|
22,054
|
|
|
|
20,949
|
|
|
|
22,092
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share
|
|
$
|
0.70
|
|
|
$
|
0.03
|
|
|
$
|
1.25
|
|
|
$
|
0.83
|
|
Adjusted earnings per
share
|
|
$
|
1.16
|
|
|
$
|
0.93
|
|
|
$
|
1.79
|
|
|
$
|
2.11
|
|
UNAUDITED
RECONCILIATION OF TOTAL DEBT TO NET DEBT AND NET LEVERAGE
RATIO
|
(In
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve months
ended
|
|
|
June 30, 2019
|
|
|
March 31,
2019
|
|
|
Proforma
December 31,
2018
|
|
|
December 31,
2018
|
|
Total Debt
|
$
|
1,007.2
|
|
|
$
|
1,012.7
|
|
|
$
|
990.4
|
|
|
$
|
990.4
|
|
Less: Cash
|
|
42.1
|
|
|
|
38.1
|
|
|
|
40.6
|
|
|
|
40.6
|
|
Net Debt
|
$
|
965.1
|
|
|
$
|
974.6
|
|
|
$
|
949.8
|
|
|
$
|
949.8
|
|
Adjusted
EBITDA
|
$
|
210.7
|
|
|
$
|
201.5
|
|
|
$
|
225.7
|
|
|
$
|
221.6
|
|
Net Leverage
Ratio
|
|
4.6
|
|
|
|
4.8
|
|
|
|
4.2
|
|
|
|
4.3
|
|
UNAUDITED
RECONCILIATION OF NET INCOME TO EBITDA AND ADJUSTED
EBITDA
|
ON A LATEST TWELVE
MONTH BASIS
|
(In
millions)
|
|
|
|
|
|
|
|
|
|
|
Twelve months
ended
|
|
|
June 30, 2019
|
|
|
March 31,
2019
|
|
|
December 31,
2018
|
|
Net income
|
$
|
31.4
|
|
|
$
|
18.0
|
|
|
$
|
29.2
|
|
Interest
expense
|
|
63.9
|
|
|
|
62.2
|
|
|
|
56.3
|
|
Depreciation and
amortization
|
|
55.8
|
|
|
|
56.4
|
|
|
|
54.8
|
|
Income tax
provision
|
|
18.1
|
|
|
|
16.8
|
|
|
|
26.0
|
|
Income from
discontinued operations
|
|
0.0
|
|
|
|
(0.5)
|
|
|
|
(0.4)
|
|
EBITDA
|
|
169.2
|
|
|
|
152.9
|
|
|
|
165.9
|
|
Unusual items
impacting net income:
|
|
|
|
|
|
|
|
|
|
|
|
Impairment,
restructuring and plant closure
|
|
27.2
|
|
|
|
23.5
|
|
|
|
23.5
|
|
Non-cash LIFO
expense
|
|
11.6
|
|
|
|
12.0
|
|
|
|
12.6
|
|
Mark-to-market
commodity hedging
|
|
1.1
|
|
|
|
0.3
|
|
|
|
6.9
|
|
UIP inventory purchase
accounting adjustment
|
|
0.5
|
|
|
|
6.0
|
|
|
|
6.0
|
|
Acquisition closing
costs
|
|
0.0
|
|
|
|
3.1
|
|
|
|
3.1
|
|
Contract
buyout
|
|
0.1
|
|
|
|
1.6
|
|
|
|
1.6
|
|
Sale of
land
|
|
0.0
|
|
|
|
1.1
|
|
|
|
1.1
|
|
Sale of specialty
chemicals business
|
|
1.0
|
|
|
|
1.0
|
|
|
|
0.9
|
|
Adjusted EBITDA with
noncontrolling interests
|
$
|
210.7
|
|
|
$
|
201.5
|
|
|
$
|
221.6
|
|
Proforma adjusted
EBITDA from acquisitions
|
|
0.0
|
|
|
|
0.0
|
|
|
|
4.1
|
|
Proforma adjusted
EBITDA with noncontrolling interests
|
$
|
210.7
|
|
|
$
|
201.5
|
|
|
$
|
225.7
|
|
For
Information:
|
Michael J. Zugay,
Chief Financial Officer and Treasurer
|
|
412 227
2231
|
|
ZugayMJ@koppers.com
|
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SOURCE Koppers Holdings Inc.