PITTSBURGH, Nov. 7, 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 third quarter
of $19.8 million, or $0.94 per diluted share compared to net income of
$7.6 million, or $0.35 per diluted share in the prior year
quarter.
Adjusted net income and adjusted earnings per share (EPS) were
$26.2 million and $1.24 per share for the third quarter of 2019,
compared to $15.6 million and
$0.73 per share in the prior year
quarter, respectively. Net income and earnings per share,
reported and adjusted, benefited from higher year-over-year
profitability, driven by the company's wood-preservation
businesses, as well as lower income taxes due to a lower estimated
effective tax rate.
Adjustments to pre-tax income totaled $8.4 million for the third quarter of 2019 and
$9.8 million for the third 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 a loss on the sale of a business
and purchase accounting adjustments.
Consolidated sales were $474.9
million for the third quarter of 2019, an increase of
$32.2 million, or 7.3 percent, from
sales of $442.7 million in the prior
year quarter. This represented a third consecutive record
sales quarter, primarily driven by continued demand in various end
markets for wood-preservation products and services.
Excluding a negative impact from foreign currency translation of
$6.1 million, sales were higher by
$38.3 million or 8.7 percent.
The Railroad and Utility Products and Services (RUPS) favorable
performance reflects increased treating volumes and pricing of
crossties to Class I customers, favorable pricing conditions in the
commercial crosstie market, generally higher demand for railroad
related products and services, and savings related to its ongoing
network optimization initiatives. The Performance Chemicals
(PC) segment reported higher sales and profitability, driven by
increased volumes and pricing for its copper-based wood
preservatives; however, its margin was negatively impacted by
increased year-over-year raw material and customer service
costs. The Carbon Materials and Chemicals (CMC) business
delivered improved profitability, benefiting from increased sales
volumes in China as well as its
overall streamlined and efficient cost structure.
Commenting on the quarter, President and CEO Leroy Ball said, "I am pleased to report that we
remain on track for another year of strong financial
performance. Once again, the strength of our diversified
business model was on display during the September quarter as we
delivered record sales for a third consecutive quarter and one of
our best-ever third quarters from a profitability
standpoint. Our wood-based businesses continued to
demonstrate strong year-over-year gains due to favorable business
conditions, market share growth and cost efficiencies. At the
same time, our CMC business posted another strong quarter in a
challenging market environment."
Third-Quarter Financial Performance
- Sales for RUPS of $198.8 million
increased by $13.8 million, or 7.5
percent, compared to sales of $185.0
million in the prior year quarter. The sales increase was
primarily due to higher volumes and pricing related to Class I
customers, favorable pricing conditions in the commercial crosstie
market, and improved demand in the domestic utility pole business.
Operating profit for the third quarter was $11.3 million, or 5.7 percent, compared with an
operating profit of $5.8 million, or
3.1 percent, in the prior year quarter. Adjusted EBITDA for the
third quarter was $16.9 million, or
8.5 percent, compared with $12.3
million, or 6.6 percent, in the prior year quarter. The
significant improvement in profitability was driven by higher
capacity utilization from improvements in wood sourcing and
increased customer demand as well as realizing synergies related to
the ongoing integration and restructuring actions.
- Sales for PC of $123.9 million
increased by $15.7 million, or 14.5
percent, compared to sales of $108.2
million in the prior year quarter. The sales increase was
driven by higher volumes of copper-based preservatives in
North America, driven by market
share gains, sales from new products and favorable pricing mix.
Operating profit was $11.7 million,
or 9.4 percent, for the third quarter, compared with $11.0 million, or 10.2 percent, in the prior year
quarter. Adjusted EBITDA was $17.8
million, or 14.4 percent, for the third quarter, compared
with $16.6 million, or 15.3 percent,
in the prior year quarter. The year-over-year increase in
profitability was due to stronger sales volumes, lower costs from
reduced third-party purchases of intermediate raw materials and a
reduction in controllable spending, partially offset by higher raw
material and customer service costs.
- Sales for CMC totaling $152.2
million increased by $2.7
million, or 1.8 percent, compared to sales of $149.5 million in the prior year quarter.
Excluding an unfavorable impact from foreign currency translation
of $4.9 million, sales increased by
$7.6 million, or 5.1 percent, from
the prior year quarter. The increase was due mainly to higher sales
volumes in China, partially offset
by lower sales prices in China and
Europe, and lower sales volumes of
carbon pitch in Europe and
Australia, and phthalic anhydride
in North America. Operating profit
was $17.1 million, or 11.2 percent,
in the third quarter, compared with $14.9
million, or 10.0 percent, in the prior year quarter.
Adjusted EBITDA was $26.7 million, or
17.5 percent in the third quarter, compared with $24.9 million, or 16.7 percent in the prior year
quarter. Despite a challenging demand and pricing environment, the
favorable results demonstrate the benefits of continuing
operational efficiencies and permanent cost savings, partially
offset by increases in raw material costs.
- Operating profit was $39.6
million, or 8.3 percent, reflecting higher profits in all
business segments, compared with $31.2
million, or 7.0 percent, in the prior year quarter. Adjusted
EBITDA was $61.2 million, driven by
the company's wood-preservation businesses, or 12.9 percent,
compared with $53.3 million, or 12.0
percent, in the prior year quarter. Operating profit margin and
adjusted EBITDA margin are calculated as a percentage of GAAP
sales.
- Net income attributable to Koppers in the third quarter was
$19.8 million, compared with net
income of $7.6 million in the prior
year quarter. Adjusted net income was $26.2
million, compared with $15.6
million in the prior year quarter.
- In the third quarter of 2019, items excluded from adjusted
EBITDA consisted of $6.0 million of
pre-tax charges, while adjusted net income and adjusted EPS for the
quarter excluded $8.4 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 $0.94, compared
with $0.35 per share in the prior
year quarter. Adjusted EPS for the quarter was $1.24, compared with $0.73 for the prior year period.
- Capital expenditures for the nine months ended September 30, 2019, were $26.8 million, compared with $81.4 million for the prior year period. The
current year amount represents general spending to maintain the
safety and efficiency of global operations.
- At September 30, 2019, total debt
was $959.1 million and, net of cash
and cash equivalents, net debt was $918.4
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 lower by $31.4 million, consistent with the company's
focus on debt reduction. At September 30,
2019, the company's net leverage ratio was 4.2, a decrease
from 4.6 at June 30, 2019.
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.
Koppers has not recognized any incremental revenues associated with
the higher pricing.
Mr. Ball commented, "While it is disappointing to not yet arrive
at a long-term solution to the dispute, I pledge to continue
fighting for the fair contractual value that Koppers negotiated and
earned as part of our long-term sales agreement. I am hopeful
that a decision on the path forward will be forthcoming by the end
of this calendar year. In the meantime, we fully paid the remaining
outstanding balance of our borrowings related to KJCC during the
third quarter and are now debt-free in China."
2019 Outlook
Koppers is maintaining its 2019 sales forecast of approximately
$1.8 billion, based upon a full
year's sales from the acquisitions made in 2018 and a relatively
strong demand environment in the company's wood-based technology
related businesses.
The company is on track to realize approximately $20 million of benefits in 2019 related to its
integration and strategic initiatives, with an additional
$15 million to $30 million in pro-rated benefits from 2020 to
2023. Of that, approximately $10
million are projected savings in 2019 related to a new
naphthalene unit at the company's facility in Stickney, Illinois.
On an adjusted basis, Koppers is projecting that EBITDA will be
in the range of $215 million to
$220 million for 2019, compared with
approximately $220 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 $3.35 to
$3.55, compared with $3.50 in the prior year. The effective tax
rate anticipated for 2019 is approximately 25 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 forecasted to occur in
2019. For the nine months ending September 30, 2019, gross capital spending was
$26.8 million. Net of insurance
proceeds of $3 million, capital
spending was $23.8 million, and
expected to be on track to reach $30
million 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, "Overall, 2019 has
been a solid year thus far and I expect that to continue into
2020. Our unique integrated business model focusing on
sustainable wood-technology solutions continues to serve us well by
providing market advantages that competitors are unable to
replicate. Moving forward, we will continue to focus on
leveraging our broad range of technical and service capabilities to
further grow our presence in existing and new markets. In
addition, we remain committed to further paying down debt in order
to reduce leverage and risk to create shareholder value."
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 1-833-366-1128 in the United
States/Canada, or
412-902-6774 for international, Conference ID number 10136305.
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/koppers191107.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 10136305.
The recording will be available for replay through December 8, 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
September 30,
|
|
|
Nine Months Ended
September 30,
|
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
Net sales
|
|
$
|
474.9
|
|
|
$
|
442.7
|
|
|
$
|
1,379.6
|
|
|
$
|
1,284.8
|
|
Cost of
sales
|
|
|
382.3
|
|
|
|
359.7
|
|
|
|
1,111.7
|
|
|
|
1,023.9
|
|
Depreciation and
amortization
|
|
|
14.3
|
|
|
|
13.0
|
|
|
|
42.3
|
|
|
|
38.5
|
|
Impairment and
restructuring charges
|
|
|
1.1
|
|
|
|
0.9
|
|
|
|
5.2
|
|
|
|
3.8
|
|
Selling, general and
administrative expenses
|
|
|
37.6
|
|
|
|
37.9
|
|
|
|
113.9
|
|
|
|
121.8
|
|
Operating
profit
|
|
|
39.6
|
|
|
|
31.2
|
|
|
|
106.5
|
|
|
|
96.8
|
|
Other income (loss),
net
|
|
|
0.0
|
|
|
|
(0.6)
|
|
|
|
0.5
|
|
|
|
(1.1)
|
|
Interest
expense
|
|
|
15.5
|
|
|
|
15.1
|
|
|
|
48.2
|
|
|
|
40.1
|
|
Income before income
taxes
|
|
|
24.1
|
|
|
|
15.5
|
|
|
|
58.8
|
|
|
|
55.6
|
|
Income tax
provision
|
|
|
3.6
|
|
|
|
8.6
|
|
|
|
11.5
|
|
|
|
24.4
|
|
Income from
continuing operations
|
|
|
20.5
|
|
|
|
6.9
|
|
|
|
47.3
|
|
|
|
31.2
|
|
(Loss) income from
discontinued operations, net
of tax
expense of $0.0, $0.0, $0.0, and $(0.3)
|
|
|
(0.1)
|
|
|
|
0.0
|
|
|
|
(0.1)
|
|
|
|
0.4
|
|
Net income
|
|
|
20.4
|
|
|
|
6.9
|
|
|
|
47.2
|
|
|
|
31.6
|
|
Net income (loss)
attributable to noncontrolling
interests
|
|
|
0.6
|
|
|
|
(0.7)
|
|
|
|
1.2
|
|
|
|
5.6
|
|
Net income
attributable to Koppers
|
|
$
|
19.8
|
|
|
$
|
7.6
|
|
|
$
|
46.0
|
|
|
$
|
26.0
|
|
Earnings per common
share attributable to
Koppers
common shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic -
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$
|
0.96
|
|
|
$
|
0.36
|
|
|
$
|
2.23
|
|
|
$
|
1.22
|
|
Discontinued
operations
|
|
|
0.00
|
|
|
|
0.00
|
|
|
|
0.00
|
|
|
|
0.02
|
|
Earnings per basic
common share
|
|
$
|
0.96
|
|
|
$
|
0.36
|
|
|
$
|
2.23
|
|
|
$
|
1.24
|
|
Diluted -
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$
|
0.94
|
|
|
$
|
0.35
|
|
|
$
|
2.20
|
|
|
$
|
1.17
|
|
Discontinued
operations
|
|
|
0.00
|
|
|
|
0.00
|
|
|
|
0.00
|
|
|
|
0.02
|
|
Earnings per diluted
common share
|
|
$
|
0.94
|
|
|
$
|
0.35
|
|
|
$
|
2.20
|
|
|
$
|
1.19
|
|
Comprehensive income
(loss)
|
|
$
|
5.5
|
|
|
$
|
(2.0)
|
|
|
$
|
35.9
|
|
|
$
|
(6.5)
|
|
Comprehensive income
(loss) attributable to
noncontrolling interests
|
|
|
0.2
|
|
|
|
(1.1)
|
|
|
|
0.8
|
|
|
|
4.7
|
|
Comprehensive income
(loss) attributable to
Koppers
|
|
$
|
5.3
|
|
|
$
|
(0.9)
|
|
|
$
|
35.1
|
|
|
$
|
(11.2)
|
|
Weighted average
shares outstanding (in
thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
20,684
|
|
|
|
20,946
|
|
|
|
20,641
|
|
|
|
20,992
|
|
Diluted
|
|
|
21,030
|
|
|
|
21,700
|
|
|
|
20,908
|
|
|
|
21,892
|
|
Koppers Holdings
Inc. Unaudited Consolidated Balance
Sheet (Dollars in millions, except per share
amounts)
|
|
|
|
September 30,
2019
|
|
|
December 31,
2018
|
|
Assets
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
40.7
|
|
|
$
|
40.6
|
|
Accounts receivable,
net of allowance of $2.0 and $2.5
|
|
|
180.7
|
|
|
|
186.7
|
|
Income tax
receivable
|
|
|
0.3
|
|
|
|
2.8
|
|
Inventories,
net
|
|
|
274.2
|
|
|
|
284.7
|
|
Other current
assets
|
|
|
21.7
|
|
|
|
25.5
|
|
Total current
assets
|
|
|
517.6
|
|
|
|
540.3
|
|
Property, plant and
equipment, net
|
|
|
409.4
|
|
|
|
417.9
|
|
Operating lease
right-of-use assets
|
|
|
116.0
|
|
|
|
0.0
|
|
Goodwill
|
|
|
294.8
|
|
|
|
296.5
|
|
Intangible assets,
net
|
|
|
172.4
|
|
|
|
188.0
|
|
Deferred tax
assets
|
|
|
18.4
|
|
|
|
15.5
|
|
Other
assets
|
|
|
24.8
|
|
|
|
21.7
|
|
Total
assets
|
|
$
|
1,553.4
|
|
|
$
|
1,479.9
|
|
Liabilities
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
125.2
|
|
|
$
|
177.2
|
|
Accrued
liabilities
|
|
|
106.5
|
|
|
|
109.9
|
|
Current operating
lease liabilities
|
|
|
22.1
|
|
|
|
0.0
|
|
Current maturities of
long-term debt
|
|
|
10.3
|
|
|
|
11.6
|
|
Total current
liabilities
|
|
|
264.1
|
|
|
|
298.7
|
|
Long-term
debt
|
|
|
948.8
|
|
|
|
978.8
|
|
Accrued
postretirement benefits
|
|
|
48.7
|
|
|
|
48.2
|
|
Deferred tax
liabilities
|
|
|
6.2
|
|
|
|
6.8
|
|
Operating lease
liabilities
|
|
|
94.8
|
|
|
|
0.0
|
|
Other long-term
liabilities
|
|
|
78.8
|
|
|
|
80.4
|
|
Total
liabilities
|
|
|
1,441.4
|
|
|
|
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; 23,212,564 and 23,028,957 shares issued
|
|
|
0.2
|
|
|
|
0.2
|
|
Additional paid-in
capital
|
|
|
215.9
|
|
|
|
206.0
|
|
Retained
earnings
|
|
|
73.3
|
|
|
|
27.2
|
|
Accumulated other
comprehensive loss
|
|
|
(98.1)
|
|
|
|
(87.2)
|
|
Treasury stock, at
cost, 2,514,249 and 2,480,213 shares
|
|
|
(90.9)
|
|
|
|
(90.0)
|
|
Total Koppers
shareholders' equity
|
|
|
100.4
|
|
|
|
56.2
|
|
Noncontrolling
interests
|
|
|
11.6
|
|
|
|
10.8
|
|
Total
equity
|
|
|
112.0
|
|
|
|
67.0
|
|
Total liabilities and
equity
|
|
$
|
1,553.4
|
|
|
$
|
1,479.9
|
|
Koppers Holdings
Inc. Unaudited Consolidated Statement of Cash
Flows (Dollars in millions)
|
|
|
|
Nine Months Ended
September 30,
|
|
|
|
2019
|
|
|
2018
|
|
Cash provided by
(used in) operating activities:
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
47.2
|
|
|
$
|
31.6
|
|
Adjustments to
reconcile net cash provided by (used in) operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
42.3
|
|
|
|
38.5
|
|
Loss on disposal of
assets and investment
|
|
|
0.6
|
|
|
|
2.2
|
|
Insurance
proceeds
|
|
|
(3.0)
|
|
|
|
(1.5)
|
|
Deferred income
taxes
|
|
|
(2.7)
|
|
|
|
5.0
|
|
Change in other
liabilities
|
|
|
(9.7)
|
|
|
|
(6.2)
|
|
Non-cash interest
expense
|
|
|
1.9
|
|
|
|
1.8
|
|
Stock-based
compensation
|
|
|
9.0
|
|
|
|
9.3
|
|
Other - net
|
|
|
0.2
|
|
|
|
6.5
|
|
Changes in working
capital:
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
3.4
|
|
|
|
(36.3)
|
|
Inventories
|
|
|
6.6
|
|
|
|
(20.3)
|
|
Accounts
payable
|
|
|
(45.7)
|
|
|
|
17.7
|
|
Accrued
liabilities
|
|
|
3.2
|
|
|
|
(38.6)
|
|
Other working
capital
|
|
|
3.7
|
|
|
|
(1.7)
|
|
Net cash provided by
operating activities
|
|
|
57.0
|
|
|
|
8.0
|
|
Cash (used in)
provided by investing activities:
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
|
(26.8)
|
|
|
|
(81.4)
|
|
Acquisitions, net of
cash acquired
|
|
|
0.0
|
|
|
|
(264.0)
|
|
Insurance proceeds
received
|
|
|
3.0
|
|
|
|
1.5
|
|
Net cash provided by
divestitures and asset sales
|
|
|
0.3
|
|
|
|
2.3
|
|
Net cash used in
investing activities
|
|
|
(23.5)
|
|
|
|
(341.6)
|
|
Cash (used in)
provided by financing activities:
|
|
|
|
|
|
|
|
|
Net (decrease)
increase in credit facility borrowings
|
|
|
(5.0)
|
|
|
|
282.8
|
|
Borrowings of
long-term debt
|
|
|
0.0
|
|
|
|
100.0
|
|
Repayments of
long-term debt
|
|
|
(27.2)
|
|
|
|
(12.9)
|
|
Issuances of Common
Stock
|
|
|
1.0
|
|
|
|
2.5
|
|
Repurchases of Common
Stock
|
|
|
(0.9)
|
|
|
|
(31.7)
|
|
Payment of debt
issuance costs
|
|
|
(0.9)
|
|
|
|
(2.9)
|
|
Net cash (used in)
provided by financing activities
|
|
|
(33.0)
|
|
|
|
337.8
|
|
Effect of exchange
rate changes on cash
|
|
|
(0.4)
|
|
|
|
(2.0)
|
|
Net increase in cash
and cash equivalents
|
|
|
0.1
|
|
|
|
2.2
|
|
Cash and cash
equivalents at beginning of period
|
|
|
40.6
|
|
|
|
60.3
|
|
Cash and cash
equivalents at end of period
|
|
$
|
40.7
|
|
|
$
|
62.5
|
|
Cash paid for amounts
included in the measurement of lease liabilities:
|
|
|
|
|
|
|
|
|
Operating cash outflow
from operating leases
|
|
$
|
23.0
|
|
|
|
|
|
Supplemental
disclosure of non-cash investing and financing
activities:
|
|
|
|
|
|
|
|
|
Right-of-use assets
obtained in exchange for new operating lease
liabilities
|
|
$
|
26.7
|
|
|
|
|
|
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
September 30,
|
|
|
Nine Months Ended
September 30,
|
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
(Dollars in
millions)
|
|
|
|
Net sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Railroad and Utility
Products and Services
|
|
$
|
198.8
|
|
|
$
|
185.0
|
|
|
$
|
564.0
|
|
|
$
|
470.6
|
|
Performance
Chemicals
|
|
|
123.9
|
|
|
|
108.2
|
|
|
|
343.7
|
|
|
|
320.7
|
|
Carbon Materials and
Chemicals
|
|
|
152.2
|
|
|
|
149.5
|
|
|
|
471.9
|
|
|
|
493.5
|
|
Total
|
|
$
|
474.9
|
|
|
$
|
442.7
|
|
|
$
|
1,379.6
|
|
|
$
|
1,284.8
|
|
Operating profit
(loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Railroad and Utility
Products and Services
|
|
$
|
11.3
|
|
|
$
|
5.8
|
|
|
$
|
31.8
|
|
|
$
|
5.9
|
|
Performance
Chemicals
|
|
|
11.7
|
|
|
|
11.0
|
|
|
|
38.5
|
|
|
|
28.2
|
|
Carbon Materials and
Chemicals
|
|
|
17.1
|
|
|
|
14.9
|
|
|
|
37.8
|
|
|
|
64.6
|
|
Corporate
Unallocated
|
|
|
(0.5)
|
|
|
|
(0.5)
|
|
|
|
(1.6)
|
|
|
|
(1.9)
|
|
Total
|
|
$
|
39.6
|
|
|
$
|
31.2
|
|
|
$
|
106.5
|
|
|
$
|
96.8
|
|
Operating profit
margin:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Railroad and Utility
Products and Services
|
|
|
5.7
|
%
|
|
|
3.1
|
%
|
|
|
5.6
|
%
|
|
|
1.3
|
%
|
Performance
Chemicals
|
|
|
9.4
|
%
|
|
|
10.2
|
%
|
|
|
11.2
|
%
|
|
|
8.8
|
%
|
Carbon Materials and
Chemicals
|
|
|
11.2
|
%
|
|
|
10.0
|
%
|
|
|
8.0
|
%
|
|
|
13.1
|
%
|
Total
|
|
|
8.3
|
%
|
|
|
7.0
|
%
|
|
|
7.7
|
%
|
|
|
7.5
|
%
|
Depreciation and
amortization:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Railroad and Utility
Products and Services
|
|
$
|
4.8
|
|
|
$
|
4.9
|
|
|
$
|
14.4
|
|
|
$
|
12.8
|
|
Performance
Chemicals
|
|
|
4.5
|
|
|
|
4.4
|
|
|
|
14.0
|
|
|
|
13.3
|
|
Carbon Materials and
Chemicals
|
|
|
5.0
|
|
|
|
3.7
|
|
|
|
13.9
|
|
|
|
12.4
|
|
Total
|
|
$
|
14.3
|
|
|
$
|
13.0
|
|
|
$
|
42.3
|
|
|
$
|
38.5
|
|
Adjusted
EBITDA(1):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Railroad and Utility
Products and Services
|
|
$
|
16.9
|
|
|
$
|
12.3
|
|
|
$
|
50.1
|
|
|
$
|
31.5
|
|
Performance
Chemicals
|
|
|
17.8
|
|
|
|
16.6
|
|
|
|
54.2
|
|
|
|
48.3
|
|
Carbon Materials and
Chemicals
|
|
|
26.7
|
|
|
|
24.9
|
|
|
|
68.4
|
|
|
|
95.2
|
|
Corporate
Unallocated
|
|
|
(0.2)
|
|
|
|
(0.5)
|
|
|
|
(1.0)
|
|
|
|
(0.3)
|
|
Total
|
|
$
|
61.2
|
|
|
$
|
53.3
|
|
|
$
|
171.7
|
|
|
$
|
174.7
|
|
Adjusted EBITDA
margin(2):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Railroad and
Utility Products and Services
|
|
|
8.5
|
%
|
|
|
6.6
|
%
|
|
|
8.9
|
%
|
|
|
6.7
|
%
|
Performance
Chemicals
|
|
|
14.4
|
%
|
|
|
15.3
|
%
|
|
|
15.8
|
%
|
|
|
15.1
|
%
|
Carbon Materials and
Chemicals
|
|
|
17.5
|
%
|
|
|
16.7
|
%
|
|
|
14.5
|
%
|
|
|
19.3
|
%
|
Total
|
|
|
12.9
|
%
|
|
|
12.0
|
%
|
|
|
12.4
|
%
|
|
|
13.6
|
%
|
|
|
(1)
|
The tables below
describe the adjustments to EBITDA for the three and nine months
ended September 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
September 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate
|
|
|
|
|
|
|
|
RUPS
|
|
|
PC
|
|
|
CMC
|
|
|
Unallocated
|
|
|
Consolidated
|
|
Operating profit
(loss)
|
|
$
|
11.3
|
|
|
$
|
11.7
|
|
|
$
|
17.1
|
|
|
$
|
(0.5)
|
|
|
$
|
39.6
|
|
Other (loss)
income
|
|
|
(0.6)
|
|
|
|
0.3
|
|
|
|
0.0
|
|
|
|
0.3
|
|
|
|
0.0
|
|
Depreciation and
amortization
|
|
|
4.8
|
|
|
|
4.5
|
|
|
|
5.0
|
|
|
|
0.0
|
|
|
|
14.3
|
|
Depreciation in
impairment and restructuring charges
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
1.3
|
|
|
|
0.0
|
|
|
|
1.3
|
|
EBITDA with
noncontrolling interest
|
|
$
|
15.5
|
|
|
$
|
16.5
|
|
|
$
|
23.4
|
|
|
$
|
(0.2)
|
|
|
$
|
55.2
|
|
Unusual items
impacting EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CMC
restructuring
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
3.3
|
|
|
|
0.0
|
|
|
|
3.3
|
|
Mark-to-market
commodity hedging
|
|
|
0.0
|
|
|
|
1.3
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
1.3
|
|
Non-cash LIFO
expense
|
|
|
1.2
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
1.2
|
|
RUPS treating plant
closures
|
|
|
0.2
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
0.2
|
|
Adjusted
EBITDA
|
|
$
|
16.9
|
|
|
$
|
17.8
|
|
|
$
|
26.7
|
|
|
$
|
(0.2)
|
|
|
$
|
61.2
|
|
Adj. EBITDA % of
Consolidated Adj. EBITDA
(excluding corporate unallocated)
|
|
|
27.5
|
%
|
|
|
29.0
|
%
|
|
|
43.5
|
%
|
|
|
|
|
|
|
|
|
UNAUDITED
RECONCILIATION OF OPERATING PROFIT TO EBITDA AND ADJUSTED
EBITDA* (In millions)
|
|
|
|
|
|
Three months ended
September 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate
|
|
|
|
|
|
|
|
RUPS
|
|
|
PC
|
|
|
CMC
|
|
|
Unallocated
|
|
|
Consolidated
|
|
Operating profit
(loss)
|
|
$
|
5.8
|
|
|
$
|
11.0
|
|
|
$
|
14.9
|
|
|
$
|
(0.5)
|
|
|
$
|
31.2
|
|
Other income
(loss)
|
|
|
(0.2)
|
|
|
|
0.2
|
|
|
|
(0.6)
|
|
|
|
(0.1)
|
|
|
|
(0.7)
|
|
Depreciation and
amortization
|
|
|
4.9
|
|
|
|
4.4
|
|
|
|
3.7
|
|
|
|
0.0
|
|
|
|
13.0
|
|
Depreciation in
impairment and restructuring charges
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
1.0
|
|
|
|
0.0
|
|
|
|
1.0
|
|
EBITDA with
noncontrolling interest
|
|
$
|
10.5
|
|
|
$
|
15.6
|
|
|
$
|
19.0
|
|
|
$
|
(0.6)
|
|
|
$
|
44.5
|
|
Unusual items
impacting EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CMC
restructuring
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
4.7
|
|
|
|
0.0
|
|
|
|
4.7
|
|
Non-cash LIFO
expense
|
|
|
1.4
|
|
|
|
0.0
|
|
|
|
0.3
|
|
|
|
0.0
|
|
|
|
1.7
|
|
Mark-to-market
commodity hedging
|
|
|
0.0
|
|
|
|
1.0
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
1.0
|
|
Sale of specialty
chemicals business
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
0.9
|
|
|
|
0.0
|
|
|
|
0.9
|
|
UIP inventory purchase
accounting adjustment
|
|
|
0.5
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
0.5
|
|
Acquisition closing
costs
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
0.1
|
|
|
|
0.1
|
|
Contract
buyout
|
|
|
0.1
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
0.1
|
|
RUPS treating plant
closures
|
|
|
(0.2)
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
(0.2)
|
|
Adjusted
EBITDA
|
|
$
|
12.3
|
|
|
$
|
16.6
|
|
|
$
|
24.9
|
|
|
$
|
(0.5)
|
|
|
$
|
53.3
|
|
Adj. EBITDA % of
Consolidated Adj. EBITDA
(excluding corporate unallocated)
|
|
|
22.9
|
%
|
|
|
30.9
|
%
|
|
|
46.3
|
%
|
|
|
|
|
|
|
|
|
|
*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)
|
|
|
|
|
|
Nine Months Ended
September 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate
|
|
|
|
|
|
|
|
RUPS
|
|
|
PC
|
|
|
CMC
|
|
|
Unallocated
|
|
|
Consolidated
|
|
Operating profit
(loss)
|
|
$
|
31.8
|
|
|
$
|
38.5
|
|
|
$
|
37.8
|
|
|
$
|
(1.6)
|
|
|
$
|
106.5
|
|
Other (loss)
income
|
|
|
(1.1)
|
|
|
|
1.8
|
|
|
|
(0.8)
|
|
|
|
0.6
|
|
|
|
0.5
|
|
Depreciation and
amortization
|
|
|
14.4
|
|
|
|
14.0
|
|
|
|
13.9
|
|
|
|
0.0
|
|
|
|
42.3
|
|
Depreciation in
impairment and restructuring charges
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
2.6
|
|
|
|
0.0
|
|
|
|
2.6
|
|
EBITDA with
noncontrolling interest
|
|
$
|
45.1
|
|
|
$
|
54.3
|
|
|
$
|
53.5
|
|
|
$
|
(1.0)
|
|
|
$
|
151.9
|
|
Unusual items
impacting net income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CMC
restructuring
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
14.6
|
|
|
|
0.0
|
|
|
|
14.6
|
|
Non-cash LIFO
expense
|
|
|
4.6
|
|
|
|
0.0
|
|
|
|
0.3
|
|
|
|
0.0
|
|
|
|
4.9
|
|
RUPS treating plant
closures
|
|
|
0.4
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
0.4
|
|
Mark-to-market
commodity hedging
|
|
|
0.0
|
|
|
|
(0.1)
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
(0.1)
|
|
Adjusted
EBITDA
|
|
$
|
50.1
|
|
|
$
|
54.2
|
|
|
$
|
68.4
|
|
|
$
|
(1.0)
|
|
|
$
|
171.7
|
|
Adj. EBITDA % of
Consolidated Adj. EBITDA
(excluding corporate unallocated)
|
|
|
29.0
|
%
|
|
|
31.4
|
%
|
|
|
39.6
|
%
|
|
|
|
|
|
|
|
|
|
*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)
|
|
|
|
|
|
Nine Months Ended
September 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate
|
|
|
|
|
|
|
|
RUPS
|
|
|
PC
|
|
|
CMC
|
|
|
Unallocated
|
|
|
Consolidated
|
|
Operating profit
(loss)
|
|
$
|
5.9
|
|
|
$
|
28.2
|
|
|
$
|
64.6
|
|
|
$
|
(1.9)
|
|
|
$
|
96.8
|
|
Other income
(loss)
|
|
|
0.0
|
|
|
|
2.4
|
|
|
|
0.1
|
|
|
|
(3.7)
|
|
|
|
(1.2)
|
|
Depreciation and
amortization
|
|
|
12.8
|
|
|
|
13.3
|
|
|
|
12.4
|
|
|
|
0.0
|
|
|
|
38.5
|
|
Depreciation in
impairment and restructuring
charges
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
3.7
|
|
|
|
0.0
|
|
|
|
3.7
|
|
EBITDA with
noncontrolling interest
|
|
$
|
18.7
|
|
|
$
|
43.9
|
|
|
$
|
80.8
|
|
|
$
|
(5.6)
|
|
|
$
|
137.8
|
|
Unusual items
impacting net income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CMC
restructuring
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
12.4
|
|
|
|
0.0
|
|
|
|
12.4
|
|
Non-cash LIFO
expense
|
|
|
5.2
|
|
|
|
0.0
|
|
|
|
1.1
|
|
|
|
0.0
|
|
|
|
6.3
|
|
UIP inventory purchase
accounting adjustment
|
|
|
6.0
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
6.0
|
|
Mark-to-market
commodity hedging
|
|
|
0.0
|
|
|
|
5.5
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
5.5
|
|
Acquisition closing
costs
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
3.1
|
|
|
|
3.1
|
|
Contract
buyout
|
|
|
1.6
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
1.6
|
|
Sale of
land
|
|
|
0.0
|
|
|
|
(1.1)
|
|
|
|
0.0
|
|
|
|
2.2
|
|
|
|
1.1
|
|
Sale of specialty
chemicals business
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
0.9
|
|
|
|
0.0
|
|
|
|
0.9
|
|
Adjusted
EBITDA
|
|
$
|
31.5
|
|
|
$
|
48.3
|
|
|
$
|
95.2
|
|
|
$
|
(0.3)
|
|
|
$
|
174.7
|
|
Adj. EBITDA % of
Consolidated Adj. EBITDA
(excluding corporate unallocated)
|
|
|
18.0
|
%
|
|
|
27.6
|
%
|
|
|
54.4
|
%
|
|
|
|
|
|
|
|
|
|
*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 NET INCOME TO EBITDA AND ADJUSTED
EBITDA (In millions)
|
|
|
|
Three Months Ended
September 30,
|
|
|
Nine Months Ended
September 30,
|
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
Net income
|
|
$
|
20.4
|
|
|
$
|
6.9
|
|
|
$
|
47.2
|
|
|
$
|
31.6
|
|
Interest
expense
|
|
|
15.5
|
|
|
|
15.1
|
|
|
|
48.2
|
|
|
|
40.1
|
|
Depreciation and
amortization
|
|
|
14.3
|
|
|
|
14.0
|
|
|
|
42.3
|
|
|
|
42.2
|
|
Depreciation in
impairment and restructuring charges
|
|
|
1.3
|
|
|
|
0.0
|
|
|
|
2.6
|
|
|
|
0.0
|
|
Income
taxes
|
|
|
3.6
|
|
|
|
8.6
|
|
|
|
11.5
|
|
|
|
24.4
|
|
Income from
discontinued operations
|
|
|
0.1
|
|
|
|
0.0
|
|
|
|
0.1
|
|
|
|
(0.4)
|
|
EBITDA with
noncontrolling interests
|
|
|
55.2
|
|
|
|
44.6
|
|
|
|
151.9
|
|
|
|
137.9
|
|
Unusual items
impacting net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment,
restructuring and plant closure costs
|
|
|
3.5
|
|
|
|
4.4
|
|
|
|
15.0
|
|
|
|
12.4
|
|
Non-cash LIFO
expense
|
|
|
1.2
|
|
|
|
1.7
|
|
|
|
4.9
|
|
|
|
6.3
|
|
Mark-to-market
commodity hedging
|
|
|
1.3
|
|
|
|
1.0
|
|
|
|
(0.1)
|
|
|
|
5.5
|
|
UIP inventory purchase
accounting adjustment
|
|
|
0.0
|
|
|
|
0.5
|
|
|
|
0.0
|
|
|
|
6.0
|
|
Acquisition closing
costs
|
|
|
0.0
|
|
|
|
0.1
|
|
|
|
0.0
|
|
|
|
3.0
|
|
Contract
buyout
|
|
|
0.0
|
|
|
|
0.1
|
|
|
|
0.0
|
|
|
|
1.6
|
|
Sale of
land
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
1.1
|
|
Sale of specialty
chemical business
|
|
|
0.0
|
|
|
|
0.9
|
|
|
|
0.0
|
|
|
|
0.9
|
|
Total
adjustments
|
|
|
6.0
|
|
|
|
8.7
|
|
|
|
19.8
|
|
|
|
36.8
|
|
Adjusted
EBITDA
|
|
$
|
61.2
|
|
|
$
|
53.3
|
|
|
$
|
171.7
|
|
|
$
|
174.7
|
|
UNAUDITED
RECONCILIATION OF NET INCOME ATTRIBUTABLE TO KOPPERS AND ADJUSTED
NET INCOME (In millions)
|
|
|
|
Three Months Ended
September 30,
|
|
|
Nine Months Ended
September 30,
|
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
Net income
attributable to Koppers
|
|
$
|
19.8
|
|
|
$
|
7.6
|
|
|
$
|
46.0
|
|
|
$
|
26.0
|
|
Unusual items
impacting net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment,
restructuring and plant closure costs
|
|
|
5.9
|
|
|
|
5.5
|
|
|
|
20.3
|
|
|
|
16.6
|
|
Non-cash LIFO
expense
|
|
|
1.2
|
|
|
|
1.7
|
|
|
|
4.9
|
|
|
|
6.3
|
|
Mark-to-market
commodity hedging
|
|
|
1.3
|
|
|
|
1.0
|
|
|
|
(0.1)
|
|
|
|
5.5
|
|
Acquisition closing
costs
|
|
|
0.0
|
|
|
|
0.1
|
|
|
|
0.0
|
|
|
|
3.1
|
|
Sale of
land
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
1.1
|
|
Sale of specialty
chemical business
|
|
|
0.0
|
|
|
|
0.9
|
|
|
|
0.0
|
|
|
|
0.9
|
|
Contract
buyout
|
|
|
0.0
|
|
|
|
0.1
|
|
|
|
0.0
|
|
|
|
1.6
|
|
UIP inventory purchase
accounting adjustment
|
|
|
0.0
|
|
|
|
0.5
|
|
|
|
0.0
|
|
|
|
6.0
|
|
Total
adjustments
|
|
|
8.4
|
|
|
|
9.8
|
|
|
|
25.1
|
|
|
|
41.1
|
|
Adjustments to income
tax and noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax on
adjustments to pre-tax income
|
|
|
(2.1)
|
|
|
|
(2.2)
|
|
|
|
(7.6)
|
|
|
|
(9.7)
|
|
Income tax - U.S. Tax
Reform
|
|
|
0.0
|
|
|
|
0.4
|
|
|
|
0.0
|
|
|
|
5.3
|
|
Effect on adjusted net
income
|
|
|
6.3
|
|
|
|
8.0
|
|
|
|
17.5
|
|
|
|
36.7
|
|
Adjusted net income
including discontinued operations
|
|
|
26.1
|
|
|
|
15.6
|
|
|
|
63.5
|
|
|
|
62.7
|
|
Income from
discontinued operations
|
|
|
0.1
|
|
|
|
0.0
|
|
|
|
0.1
|
|
|
|
(0.4)
|
|
Adjusted net income
attributable to Koppers
|
|
$
|
26.2
|
|
|
$
|
15.6
|
|
|
$
|
63.6
|
|
|
$
|
62.3
|
|
UNAUDITED
RECONCILIATION OF DILUTED EARNINGS PER SHARE AND ADJUSTED
EARNINGS PER SHARE (In millions except share
amounts)
|
|
|
Three Months Ended
September 30,
|
|
|
Nine Months Ended
September 30,
|
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
Net income
attributable to Koppers
|
|
$
|
19.8
|
|
|
$
|
7.6
|
|
|
$
|
46.0
|
|
|
$
|
26.0
|
|
Adjusted net income
(from above)
|
|
$
|
26.2
|
|
|
$
|
15.6
|
|
|
$
|
63.6
|
|
|
$
|
62.3
|
|
Denominator for
diluted earnings per share (in thousands)
|
|
|
21,030
|
|
|
|
21,700
|
|
|
|
20,908
|
|
|
|
21,892
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share
|
|
$
|
0.94
|
|
|
$
|
0.35
|
|
|
$
|
2.20
|
|
|
$
|
1.19
|
|
Adjusted earnings per
share
|
|
$
|
1.24
|
|
|
$
|
0.73
|
|
|
$
|
3.04
|
|
|
$
|
2.84
|
|
UNAUDITED
RECONCILIATION OF TOTAL DEBT TO NET DEBT AND NET LEVERAGE
RATIO (In millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve months
ended
|
|
|
September 30,
2019
|
|
|
June 30,
2019
|
|
|
March 31,
2019
|
|
|
Proforma
December 31,
2018
|
|
|
December 31,
2018
|
|
Total Debt
|
$
|
959.1
|
|
|
$
|
1,007.2
|
|
|
$
|
1,012.7
|
|
|
$
|
990.4
|
|
|
$
|
990.4
|
|
Less: Cash
|
|
40.7
|
|
|
|
42.1
|
|
|
|
38.1
|
|
|
|
40.6
|
|
|
|
40.6
|
|
Net Debt
|
$
|
918.4
|
|
|
$
|
965.1
|
|
|
$
|
974.6
|
|
|
$
|
949.8
|
|
|
$
|
949.8
|
|
Adjusted
EBITDA
|
$
|
218.6
|
|
|
$
|
210.7
|
|
|
$
|
201.5
|
|
|
$
|
225.7
|
|
|
$
|
221.6
|
|
Net Leverage
Ratio
|
|
4.2
|
|
|
|
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
|
|
|
September 30,
2019
|
|
|
June 30,
2019
|
|
|
March 31,
2019
|
|
|
December 31,
2018
|
|
Net income
|
$
|
44.8
|
|
|
$
|
31.4
|
|
|
$
|
18.0
|
|
|
$
|
29.2
|
|
Interest
expense
|
|
64.5
|
|
|
|
63.9
|
|
|
|
62.2
|
|
|
|
56.3
|
|
Depreciation and
amortization
|
|
57.4
|
|
|
|
55.8
|
|
|
|
56.4
|
|
|
|
54.8
|
|
Income tax
provision
|
|
13.1
|
|
|
|
18.1
|
|
|
|
16.8
|
|
|
|
26.0
|
|
Income from
discontinued operations
|
|
0.1
|
|
|
|
0.0
|
|
|
|
(0.5)
|
|
|
|
(0.4)
|
|
EBITDA
|
|
179.9
|
|
|
|
169.2
|
|
|
|
152.9
|
|
|
|
165.9
|
|
Unusual items
impacting net income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment,
restructuring and plant
closure
|
|
26.1
|
|
|
|
27.2
|
|
|
|
23.5
|
|
|
|
23.5
|
|
Non-cash LIFO
expense
|
|
11.2
|
|
|
|
11.6
|
|
|
|
12.0
|
|
|
|
12.6
|
|
Mark-to-market
commodity hedging
|
|
1.3
|
|
|
|
1.1
|
|
|
|
0.3
|
|
|
|
6.9
|
|
Sale of specialty
chemicals business
|
|
0.1
|
|
|
|
1.0
|
|
|
|
1.0
|
|
|
|
0.9
|
|
UIP inventory purchase
accounting
adjustment
|
|
0.0
|
|
|
|
0.5
|
|
|
|
6.0
|
|
|
|
6.0
|
|
Acquisition closing
costs
|
|
0.0
|
|
|
|
0.0
|
|
|
|
3.1
|
|
|
|
3.1
|
|
Contract
buyout
|
|
0.0
|
|
|
|
0.1
|
|
|
|
1.6
|
|
|
|
1.6
|
|
Sale of
land
|
|
0.0
|
|
|
|
0.0
|
|
|
|
1.1
|
|
|
|
1.1
|
|
Adjusted EBITDA with
noncontrolling
interests
|
$
|
218.6
|
|
|
$
|
210.7
|
|
|
$
|
201.5
|
|
|
$
|
221.6
|
|
Proforma adjusted
EBITDA from
acquisitions
|
|
0.0
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
4.1
|
|
Proforma adjusted
EBITDA with
noncontrolling interests
|
$
|
218.6
|
|
|
$
|
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.