KOP - Earnings call transcript Q2 2018

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, ladies and gentlemen, thank you for standing by. Welcome to the Koppers Second Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] Please note, that this event is being recorded. I will now turn the call over to Quynh McGuire. ahead. go Please

Quynh McGuire

release morning. and good XXXX McGuire, of earnings Director conference Thanks Communications. I'm Welcome Relations press quarterly our Corporate We quarter today. to Investor call. and issued Quynh earlier our earnings second

website You www.koppers.com. via at may announcement access this our

the our will to being be our today's Consistent September Relations indicated referenced posted available in we practice also our our site website of on on recording will with conference live is release on broadcast earnings As page calls, in morning, through of this replay have a materials our Investor that this XX, for call prior website call. XXXX. and this be

directly financial including comments which get to Company provided GAAP Securities call be on financial would these like conference and These started, forward-looking to no forward-looking or may number objectives, statements direct website, The be we involve implied the be characterized is Company's may the or reconciliations a financial In forward-looking light performance Company's in forward-looking significant risks our the update with inclusion obligation statements. Securities Act as made comments, as Reform of included expressed it's I forward-looking measures. made Private measures during Commission. filings during Exchange certain results, statement. risks also projected the the not Company's made statements assumptions, to defined References any under most release, a to differ non-GAAP may achievements Company results inherent should in will and has measures plans regard materially uncertainties described information such that as this you call. it's with available attention non-GAAP Before representation XXXX. in The the actual included uncertainties, of cautionary Certain comparable our from by press in in today of statements assumes Litigation your of press and forward-looking in statements disclosure the and and the of release our such achieved. this the statement to the those

Joining for Zugay, Officer. turn I'll to Koppers; Leroy. Financial CEO are, of the our Leroy me call Mike Ball, Chief call and now and President over today

Leroy Ball

Thank second you, to Quynh. Welcome our XXXX quarter call. everyone earnings

Harm. Let's Since giving the the employees peace introduced completed our mitigate component start facilities life made by workshops then, reviewing XXXX progress rules people about across efforts. education our legacy mind In greater activities the Koppers risk at we ongoing Zero to on safety globe all high of of job. the journey saving have early to latest on their while designed our help critical most safety our this

Company's Energy Industrial to our to the most employees processes, more been corporate now To has our team and the of MA In are our engage those on the rules addition, staff Zero newest to well. include Resources, primarily delivered life members frontline date Harm who of products inherently saving come. deploying introduce we're locations Koppers Zero the foundations at our culture. safety currently to and Harm with focused our from Utility to as and being hard training working The training in employees training and hazardous we're

words to going the our to culture, has day organization and we in are actions have effects As on safety. important everyone day advance strong continue our our to that of a it's understanding

pleased our responsible opportunity challenges opportunities, our Zero I'm related six months leadership safe sessions leaders skill environmental first year putting to to including up in topics. in Koppers gathering the recordable third take provides and for our through activities newly of ongoing on another of to total Additionally, commitment and Pittsburgh it operations, learning top our energizing year continued locations that as part leading event decline Ways for acquired building Zero be high in performance. form. coming This safety, and Harm has to again annual the to and share is and we'll an rate September us reaffirm health global discuss always pace

have I appreciate remain improvement to-date always, safety made that our the Zero. get dedication to as As continuing on for to We've significant to both progress further strive their themselves and we employees and for colleagues. focused

basis for in year adjusted let's prior compared June the financial quarter Now On our talk $X.XX the second performance. with about quarter period. we $X.XX an delivered

due compared efficient Our more carbon cost market period trends, prior materials with as and chemicals or year again well results structure. delivered positive the strong as and to CM&C business streamlined

benefit for year even in from least and fact, the where market margins our growth. adjusted we the product a cost XX.X% the EBITDA turnaround. in products the and carbon-based continue is normalize. to EBITDA upwards was our of raw would at maintenance our receiving outperformance in look quarter a business, first to was were Unlike continue supply segment various that North CM&C to long consecutive demand and this longer. will we was it global All segment can quarter see higher we from quarter of major in delivered the question and XXXX, The due that things maybe second out indications what our Adjusted when good while very from needle-co we're driven tailwinds to margin on the the Xth XX% the European as a material the prior has infrastructure. China put this Higher our take repair sustainable to sort driven was performing and pressure second them In major of portion quarter. while businesses, of through than China for like remains fact tightened quarter how continue in environment American pricing little customer profitability

raw producing a costs. of increased various us business and of than Now materials our sales have than PC raw caused profitability reported purchase difficulties to lower for an market more overhead Performance even higher raw our The drove and material with unfavorable would Chemicals cost intermediate or product have material year-over-year process to installed had the higher that mix, that one on open our production anticipated. liked, cost we to newly we

we demand had quarter the in the that Now would materialized. to winter lead never second hoped pent-up really which extended

million and adjusted So was adjusted some EBITDA we're result speculating of EBITDA that traders the high an record of EBITDA prices buying waiting minimize causing while XX.X% fall. XX.X% of margin prices had patterns compared to white lumber an EBITDA million $XX.X year. adjusted inventories wood changed The last to of $XX.X to and adjusted for

by Utility the and result although business, higher were acquisitions and Products Services the Utility of recent competing hardwoods or of Energy commercial volumes year-over-year in markets. a sales a Industrial as Industrial terms demands Railroad of profitability a the Cox market business; reduced In transitioning was reduced customer as result for to the RUPS, major products our treated-type due of program a in our affected of MA hardwoods availability and other

quarter program. that of second costs. expect up the year $XX.X improving to Now by last our to to the million was of to better commercial the back I'll see EBITDA heating turn related for half the market acquisitions discuss are customer from now some which way from of times than a million and $X.X year, to integration Mike profit as on type over the significant net fully Better was I the adjusted contribution the and now again, the major highlights we've key transitioned due sales it the quarter way treated XXXX. driven

Mike Zugay

Leroy. Thanks,

been partially reducing delaying acquisitions, which primarily commercial two seeing reduced recorded higher XX% volumes for higher their X, the recent Europe feedstock well sales from Class On million due black and Slide lumber were with sales by wood-treating reported across from railroad regions that cross-ties in carbon sales; provided which prices on the we supply. quarter. favorable RUPS the higher tight pitch were a and reported we of was however, slide to increased of presentation which due website. trend million our start PC sales the of customers. as to pricing Australasia Let's X million all their joints trends increase year was offset due CM&C rail with or prior customers or our slightly volumes as an carbon experiencing to activities cost. and have $XX $XXX higher $XXX

As X, we see XX% that with million $XX the on EBITDA compared XX% we or Slide will year to or million move quarter. adjusted prior was in $XX

by While offset the CM&C more delivered from significantly higher RUPS. profitability the lower it PC and both was than margins

margin structure, and partially market substantial quarter, Australasia. an offset more streamlined in adjusted to favorable trends costs material and cost by and CM&C EBITDA improvement delivered higher basis the raw due Europe For a again on pricing

sales weakness demand cross-ties. as availability year prices, costs the to of was in flat also higher year-over-year While driven as compared PC reported relatively an general railroad sales slightly associated lower X lower quarter, to with EBITDA prior higher adjusted unfavorable margin selling, raw due continued RUPS profitability for the Class and mix, costs. the well higher and administrative limited material for lumber by was

as to quarter for restructuring year quarter. income million continue pretax share items with the our expenses. are have the $XX expense in year. current as of per the LIFO in million not $XX tax per to are income primarily a that of prior million was related quarter and primarily a $XX Cox we And share income were results. restructuring $X Now tax the reform of $X.XX like Adjusted Adjustments income significant and discuss full acquisition, in a accounting for presentation. to referenced to several the the million, to $X.XX was I'd prior closing due in projecting slide prior in mid-XXs. to the the The effects rate on totaled purchase earnings Tax adjusted quarter pretax and compared adjustments mentioned, U.S. the net percentage year Adjustments consisting were effective our in Leroy with clause impact compared expenses. quarter cost the year XX% second

we guilty was $X.X on further otherwise tax corporate Tax guilty from recalculated element the continues regulations rate million benefit an XXXX. Act. reform. tax significantly Compared introduced XX% prior in tax enjoying this tax This influenced after would the to largely the XX%. be this XXXX be quarter of rate related tax of to additional year offsets cost quarter our by earnings incurred from year as of IRS tax We a the fourth drop the that or we incremental transition The Reform minimum released to the initially of recorded the in the the to tax the foreign that we interpreting tax the charge

tax loss that utilize cash reduce the to foreign taxes significant tax tax expense incurring actually carryforwards cash effects related guilty able and to very we're are minimal payable. are the we as item, While to the credits are

the million in PC the $XX safety facilities amount our balances of to highlights; provided $XX period. production to from the Stickney, and higher in cash the was and in activities million at and efficiency was $XX material further of $X compared holding the Some The rising units operating in compared raw QX. due new our on CM&C higher decrease the increased cross-ties, prior receivable current Illinois; with operations. untreated global general sales accounts capacity result net capital prior the from plant were spending consists naphthalene To-date of expenditures million inventory year at million our cost, spending This in maintain additional year expansion year. U.S. to

turn presentation X. Page and back let's the to look slide at Now

pro times June ratio and forma on X.X earnings was leverage from forma XX net our as the Our a of that acquisitions. includes pro basis

below this times the pro net expect end XXXX. at or ratio X.X leverage We to be of by forma

to was including second on-hand quarter cash approximately of addition at end that the have million. liquidity our the that In our bank agreement the $XXX under we

turn to like the over Leroy. I'd Now to back discussion

Leroy Ball

Mike. Thanks

our the of in Service showing markets. the for and our commercial rail are the outlook with Revenues Product start from RUPS segments, Regarding joint crossties legacy business. Railroad let's business Utility each business improvements

or carload recent However achieved be which same remain at Class American at $XX railroads of sales RUPS to year-over-year XX demand will we with up from million categories XX According XX%. that month for the categories in were AAR, the least half the of low X increase. and intermodal by period profitability levels, XXXX and the acquisitions months year. Association in relatively straight of primary the Total expect X% from was Total marks June, gains X.X% the XX term U.S. while streak late the up third for in or Railroad to The XXXX. commodity for traffic that we potential up units a in since X.X% including six remains year continue of for disputes. although increased compared combined solid trade traffic the watch the railroads longest longer for first carload last threats economy XXXX U.S. outlook last with saw first

hardwood tie a But Energy more of solution help them supply. responsible our weaken profound supply with the disposal from we've were certainly start providing decline increased to shows year. X/X explain the lot crossties more way The to crossties. to of further than most tie quite their on opportunity recent our to current proof the untreated to to for the demand for treated Tie of on inventory industry sustainable challenges, used demand suggests in about our improve data material and tie strong to of crossties through could customer's realize and limited According And consecutive base. waste. discussions railroads of our to the Railway to their months a we great current costs substantial that for higher dramatic positive solution we how there solve front Association as related customer XX to acquisition. expected of rail led purchases believe It our success market been the data sustainable MA disposal their are and for move for availability higher number end-to-end and wood had a in a mission commitment is we'll interest rising I tie our raw pricing let's important Now rail living through today to get challenges report, has sustainability trying our commitment hardwood was most the for has much

our $X in reflects our Now we're net million prior for on segment which providing business of RUPS the as year. approximately million from Slide legacy X; adjusted guidance acquisitions, as XXXX contribution $XX as reflected from the decline the well

from who opportunities and Integrations, have number we'll of certainly fourth leverage And as decreased MAER, the decline are reports treating those effect teams as which that existing Product buyers our Now and business; of remodeling to existing of mixed. the National and see sales NAR Chemicals most The and for they synergies on occur. an fewer have and Essentially month home I and a could Association yet that are Industrial some sold, And significant below with Performance inventory severe emerge total projects. third the believe team's being guess, recent working year evaluated. exciting straight to or early improvement indicators June, and a distribution share We'll analysis Realtors might in continue decreased as that being now you begin market on shortage in homes existing to on our homes X.X% those integration sales a we network of currently larger year. our are Utility as several X.X% developments home means are network this sales spend ago. home quarter this

decline pricing NAR sales. housing would supported attributes to to attributes also and is in is Our sustained the by shortage buyer growing of which sales being the buyers sustained a home many housing out in level a country shortage which pricing of most home demand be not inhibiting which

said, Housing to part homeowners Harvard steadily increase for activity the Joint on according University. the that leading of repairs expected spending indicator year improvements Now in Studies LIRA, Center over of to coming or remodeling of the are

June the high decreased May, the ahead, expectations Board XXX.X on Index curtailing do expenditures nearly annual the for middle of the holding that the the around remodeling Board taper consumers even in remain expected in in to is by suggests inventory optimism half to Conference while but will $XXX said. momentum standards billion growth and XXXX residential first improvements The historical but is much spending see in months year. next remain from by low homes of still homeowner projects LIRA repairs XXX.X down the back reach larger gaining that existing Again, annual sale Now still economy in Consumer somewhat gain of by homeowners Confidence in [ph] X%. not modest Conference

cost able but slide result approximately the large I higher than an we're open over a scrap XX can position copper reflect what to cost also material is us last there cost is earlier higher As call of XXXX. having raw to the that Page of having $XX more costs element the produce XX in to comes as mentioned purchase as months, copper average to to on increased higher portion at the higher comes material from on of which of based see average you million of on anticipate intermediate market rising prices. contributing copper presentation, A X our the cost hedged we raw that

been past capacity until become capacity additional half add to sometime months existing deep won't we've the be of in likely bottleneck XX self-sufficient so XXXX. Now and but not we're and over there working the first we'd yet that

In of addition, the no of benefit. of ineffectiveness approximately with million; adjusted recent prior hedges. expecting than XXXX our million we approximately for expect $X year. hedging PC cost SG&A ineffectiveness longer changes we our Also $X lower higher million XXXX we'll In in we're therefore of the $XX record accounting million EBITDA generate realized which requirements $XX be is to recording

we bad do segment. the as PC in to this good well that's have in news share some So news but

it be have should this the or XXXX, product whether or little sales nice from store their major decision made to is late planned box transition contact The wood ground microprobe heading effect product balance it through copper the [ph]. patented boost unit increase to technology has provide occur fall payments. it will royalty a based a Our and program on to of recently convert XXXX soluble treated while our into

based In all end we'll CM&C would even was talk we've we beginning environment been market aluminum eight the has anything companies years for our the on news a that heat tariffs never lines supplies U.S. the And And products the our three our markets the serve experiencing ways market this years extended working In for now raw will with about account we're coal-tar restarting close addition, been products be up mistake, we now. tight, out are already an It for great dynamics current remainder support take to strategy, therefore higher able ago achieving and the my success longer to in surging on the several did smelters new we're and right front The if and no did strong, a the sizable up record way and capacity international streamline to market XXXX realized our but commercial to believe compared the XXX that the our in to not not least, U.S. next to very aluminum material carbon to challenge pricing term Section a on business, actions while the we aligns period part products. still the we then vital some landing. stronger for by be year being setting value of the our in adds XXXX. remotely earnings a that working be Company. make are went with that of call that

far XXXX, result other longer and in of the tough like horizon. been big predict to time has China over China our becomes emanating it Now from in segment most things this driver thus

little pricing, which down That first ran drive the customer for operation our main environmental supplier soft-pitch contractual their were throughout in the maintenance Our due additional down to that second their in close and we product their anywhere outsized did partner quarter material first we therefore able Therefore profitability and while realize and a customer control elevated the operation quarter. took to realize that needle-co in didn't equipment. to the them install raw [ph] took to to same profitability turnaround supply large quarter. we quarter prices operation our

further we'll the weeks two Now supplying starting in process next year. resume supplier product within be the balance are up both and the expected and the and back of to of are customer

each between of somewhere Now of will quarter in will overall first this likely last year. be but determine quarters profitability and it the two ultimately second pricing the numbers the for

continue quarter the testing and have the completed be has working the B our and thank with expected other received fully in relationship, earnings to Now our disagreement periods, We of high outstanding contractual quarter's certain with naphthalene in fourth to maintaining resolve point mentioned a started July project within customer higher fallen quarter. of for with construction our Illinois not largest be been is we to note in through to new the walk the been to Stickney, safety. commissioning at Koppers revenue There phase. respect the on of time. and any this understated quarterly with unit and as we're and did individual last bring while believe third that the is with functioning for in recognized the to while associated facility pricing Testing that the transition call, our people discussions China end our to price that downs intend engage has we believe many equipment should accurate. in they so more in we've this completed in we fruition by currently work customer provisions incremental are accordance by one at that final that for standards to we've And plan the number early the occurred

now pushes the one various to sales from for PC XXXX, prior As sales CM&C segment around shown billion. and prior in over of can consolidated anticipated anticipated On change major expectations XX, the on of regions. our you around Slide million EBITDA performance reflects is XXXX to the a XX the for XXXX year $XXX which drivers adjusted approximately improvement our quarters is $X.X see our guidance $XX superior in our the our Slide reduced which represents all growth million guidance

per to Accordingly represents $XXX compared on includes acquisition, Slide EPS an our would adjusted a record plus be new guidance $X.XX XX; $X.XX Turning between and of adjusted the using per which prior share projected compared of in guidance basis $XX for company a is EPS the million consolidated XXXX which increase the million midpoint the to EBITDA approximately $X.XX and million. remains XXXX increase it $XXX EBITDA with and year represent for XXXX to our XX% share XX% high adjusted from range. at adjusted

worth halfway capacity. performance of markets, is EBITDA begin guidance point right of results as expect the environment. basically to our of results $XX adjusted is from treated months intermediate that acquisitions new half with experience In running a of in on the only over the with from ton in through customer and around we're the $X million production able year benefit business the in we of we're conversion the the at no least raw our chemicals our the half first new the commercial six $XX open same lowering will strength our be million diligence one quarter. now our half. what to CM&C of our through integration product for which there upside one more naphthalene in of million a strategy to we synergies. materials projecting quarter's as halfway first mark cost our economic second And Now program of roughly essentially purchased own unit delivered the the are we to related and market had stabilized expenses of and means similar virtually starting we rail our half and only look In first major type are to second In

little of should better estimate million us. they between for Europe opportunities pricing account risk. headwinds will at a and end never face with higher that the I've we Australia Now an in elevated In and wildcard stand a exciting prices $XX first market from needle-co up adequately felt front pricing differential our but have It's the raw bit time actually of catch is that we we some of the Koppers. summary, and and there half where second we in half the about a as as believe to material

up like for I'd open questions. it Now to

Operator

first [ph] The will of from Roger Instructions] America question Bank [Operator Merrill come of Lynch.

Unidentified Analyst

customers remind increase us going Class service would you from model? X how fully volumes understanding that sounds volume moves It maybe Can as a crosstie but -- with crosstie treated from that clearly. treatment-only the like I'm not lower

Leroy Ball

two right. The actually are separate,

tie essentially working some a you're that overtime is industry and been working moving converting for it capital. the untreated taking So crosstie the railroad time our and treated basically model, on you has now into to transition, as books capital

so untreated rather tie than end carrying into treatment sales until the ties. the preservative And the capital then process, now an fully the waiting selling process treated treatment bifurcating and working you're a and and all

now to where So fully the to have work get just their to inventory to through product treatment point process you the the a and you're selling preservative. completed opposed as treatment

back relative to over anything itself we've from a seen so, year change about step they talk lower that's have with we insertions tie just on unrelated the demand, that program. do pulled the when So in or business dynamic as doesn't it so demand demonstrating a the have to demand their industry that in the past but back model, more it's

Unidentified Analyst

in why mentioned the were And [indiscernible] volumes, maybe remarks you've those down? volumes prepared but

Leroy Ball

that market. good a of portion a we have good It's question,

better. due again, across down some in everything volumes we categories basically operating the is you actually markets given our pretty point say of been footprint; a see be healthy, have us producing volume fact I take don't essentially into the shrunk overall have as in say so we've to to all answer and likely been shifts I'd changes might that but quarter. account overall so of -- really we business contracting specific the some scaled we're general of volumes could our related I'd our just Sometimes obviously and product it never in a to. the that back just and that market when even have is some be down, really

Unidentified Analyst

and don't same answer I your past this think that's on I think fully with been to shutdowns do covering because I Obviously, pitch volumes, the has anniversaried.

maybe higher or partly is part to are segment not down the -- been So is that the reason that shutdowns? due across incorrect, the of volumes has

Leroy Ball

regions are through different second China the operate essentially have is limiting different the of in customer and going activity our our we the as as spots we to we was fact different factor and certainly at their decline on very did that's supply part have time. or to know again, you would Overall, volume a come around maintenance to quarter did second China only little are own material there business being the big quarter. mention so that to much -- more Well, side the be we around working in so what the the I only out in produce less large globe -- of and we well. confined go raw able ability pitch turnaround; to

So combination the be much going market and really, market sensitivity to like of as a volumes; think how there the again, at at. it in to a to temperature going so The we creates different and markets high to factor which where affecting us a -- volume the for is is some because obviously play coal-tar be get you dynamics can -- industry trying -- are are supply back go so we're around. is only limiting it's without also between I forth and price pricing the again, market but things, pretty as strong, is strong overall pretty position, we much

Unidentified Analyst

PC, the you're intermediate was carbonate? is copper basic to referring In chemical that at

Leroy Ball

material, based -- intermediate getting specifics without copper a it's raw a into yes. It's copper

Operator

of come Research. The will Chris from next Howe Barrington question

Chris Howe

here. questions few had I a

done; more end kind is right moving going should is where the room The you the environment acquisitions just to be of forward looking the into are companies? year, given and in to to with expand we looking acquire of X.X that how opportunistic pricing regard it ratio first be to leverage the you've that recent looking And rather than opportunity? the to is there expect or is the that by of some times

Leroy Ball

When you I talk your the understand want to environment, I make about pricing just question correctly. sure

businesses the about the the bought? market? in markets You're about talking the environment in the pricing pricing we've You're talking M&A of environment

Chris Howe

M&A market.

Leroy Ball

In the M&A market.

buyer's opportunities, obviously always think to obviously, look -- we So continue the down comes it to I at expectations. it

business at are held, smaller to for of to family-owned so overall make, that we're is a some has But great bring about to willing each opportunity bit the I a really synergistic in you're little acquisition higher to some the don't in we an and in higher price. comes pay the to businesses, to businesses, part acquisition be that, seeing double it If seeing I'd to us the -- so think well. closely tend any it it again I expect We a mix. many The as down they so most than we higher; cases M&A different, deviate there and methodology. multiple seeing eight we're range expecting that really in and and could benefits, valuations. from higher looking is the dealing we're companies aspect it's digits seeing others in see we're market want -- say, much smart emotional be with our six we be more

Chris Howe

an else or these internal far there shift the provided to different is year? as is you've that begin look out bit we trends on expectation this there further as there anything of of the buckets, trends that within than as Just little may -- some color lot a

Leroy Ball

ourselves be we're to we lot try some guidance, some there for choose, -- things things we enough is annual going we and annual wrong think we to wrong we be give that going so that us. because don't we downside, we always give with that within know provide and guidance -- to everything of we're know to be move so around our right, wrong -- know upside, we're give going there and a the to we against the buffer to businesses, I is quarterly guidance move to that

through as was that our expectation on I some part see certainly we out performance quarter, there demand pent-up business. to of an first would the look So coming the coming chemicals

reason sort in really sort quarter in China expect of when was fact, that. we that In the the a year our the it operating and back gap we half quite because of really operations would thought. level of over early call way that quickly for we the part early in to fill we quarter doing it That saw back some of of no the May, had but a second were had the flattened we so the that at seen out; didn't in materialize frankly, what we develop in

our into it we somehow; for about our built go is side, on. for we're buffer material from against talking so start participate out error soon. creatively to supply, raw things reduced ideas we're good very and for the and we a but had the restarting and carbon the we tight market products, don't figure margin and see it's numbers time to certain long-term So, like those so our us account The that chemical how working trends material very in are idle overall, working might on that, several any can really changing aluminum When smelters we things that lines pot bullish have market decisions.

So side, I soft the a business going soon. market trends those the on again really the or ties shifting side. is to -- segment the third tie don't But rail changing see market product fairly Class anytime X on

some -- go improvement, to historically we modest continue with the for maybe a While years back also we that that's time three don't expect trend again some so high thought don't to some levels uptick. continue expect there to going expecting to really -- we're ago; is expect that that to that we

looking less or the color the around business what So different Is you're that's segments. that for? more

Chris Howe

that extracting in. that margins; you question last assess And beyond the we go year you're How basis this sneak mentioned a should one and is. forward Yes, the on efficiencies just if structure. I then levels may moving regard cost margin in it to within This that? forward

Leroy Ball

be, as to more drive be XX% mid spot. to our certainly certainly, we to as planning where to has low been to sweet there processes somewhere think target -- were want working certainly be think average stand think but this that's XX% that's that within been to been realistic for there EBITDA through within the a it I high some We of I comfortably we but six at margin, as deliver basis want I in somewhere our we it XX% times, within different at back to we and drop I that we'll likely upon range. months year, first the but well we'll depending that And where wait range where markets that back to target want see -- XX% want really go-forward teen we've has our in still can different a on is be which range. would half at bit little

Operator

next will FBR. The Burke Riley Liam from B. of question come

Liam Burke

this to and up on-schedule fourth mentioned it testing you'd is and be running quarter the Leroy, you Stickney year. expect

Follansbee, -- anticipate timing essentially taken when the would would -- realize service terms transportation benefits cost of being you Follansbee would the what the what's be realization? that of the you and In offline savings when of timing,

Leroy Ball

we'd also So the that in Stickney that we out fourth some unit of sure as make in to to but stabilized need expect that realize quarter well.

some I'd of it in we come So quarter the Is to say year we that of it but all expect quarter year. have won't fourth in the of accurate? this this fourth

Mike Zugay

majority the come will Liam. Yes, in XXXX

Liam Burke

on customers? the with there is the costs flexibility KPC, on have And your side input or you copper any pricing

Leroy Ball

underlying we except price, that's no, many larger our cases when right. more lock agreements them hedge pricing, copper or with in the we in I'd customers because of Most say, less multi-year

the so the more there in competition that bit different effect stuff it's reactions that the tends to we've out market gain, on -- guess it the some as we in is run for have that been might but a pricing be customers an earn. the of have market. that flexibility to an we've pricing market some might you pretty of been that smaller And into able So quite in that to share can causes market able industry competitive, more share to and

question that. of always us have and it, you sensitive reminded to our that, be So customers no to certainly about there is

pricing for somewhat near-term limited. certainly the think I our So, is ability

Liam Burke

work because of on didn't state? then -- -- demands, to purchasing kind operational increased capacity it's going expanding steady as of the be or front, benefit has steady do not that avoid to anticipated; ramp going a the assessed any on event expect year? when been 'XX to is be And a you I outside you this mean state

Leroy Ball

that the be on issues we our had remaining half to place own has half 'XX sort we've -- of we buy in to stabilize of say, going in buy putting capacity need or and all some second capacity to think of stabilize we is some in terms open will benefit in in a year. less the as the second just there intermediates, think as operations think the the the essentially I first market But -- need I I half with online the need of the to the let's the in that's new that here event. supplying come but

Operator

The Emerald next of [ph] question will come from Advisors. Scott

Unidentified Analyst

available on that to following us remind Liam's you question; with capacity how just once PC your be much you're up done to -- additional Leroy, you're expansion? that's going can going be

Leroy Ball

-- buy about on we what where we of that to pound said I'm I that this to that standpoint believe produce which XX point levels, we're by million on we're production that that about internally scrapped we're annual pounds buy today current be was up up is what and our basis outside supplemented a believe we that From done, are time million number of pounds we I XX million and based level all XXX% to or XX not copper and of of is in but I believe goes when going an at need. able sure

Unidentified Analyst

did Have customers mention to not? an of sales is you you I have majority or given guess that -- overwhelming anybody ever the portion And your as you idea portion a contracted. you that given ever much the of us or are how have and

Leroy Ball

No.

Unidentified Analyst

last so a could I -- price there or small the of benefit XX% copper. we've mean, the certainly that is portion seen a decline quarter in from But in

is you that all from [ph] it diminimus get so at impactful? is or is amount to benefit just So the that that be any -- there just should wouldn't it

Leroy Ball

be but would it not be about but no it benefit a material, it. question would be would very benefit, It a

Unidentified Analyst

year did through to rest pitch you QX, would expect you price China there. be pricing and be you of be the and really go we situation; for you set the you've you on going I customer guess pricing Can pricing like were higher mention expect to coal-tar or mentioned where in that the since somewhere obviously your QX to have negotiations between some a don't obviously lower… that there is

Leroy Ball

been to keep the to around to minimum through be we is that advised going to have Scott, because my process really to situation set. I go I the I've to agreement as have pricing gain that mean on how through -- really process I be careful we're gets really comments careful, old a try

better. result to me, would think pricing expect not second quarter; year be the somewhere the it the just be therefore the the said between quarter, first for between described call, quarter. of less to best would half first average -- and net somewhere and me so be second in the in We And for we I really it second

Unidentified Analyst

don't I And volume guess have to you an you that understand there that -- any just that contractual -- with with customer possibility but somewhere agreement is volume that reach if I is regard situation, you move there else? could that

Leroy Ball

Yes.

Operator

of Shaw Crespi. next will from The Moness, Chris question come

Chris Shaw

was think there, given translating to market that in your heating Leroy the point more color isn't of of you thought why terms from I mentioned -- I that what's -- a little ever commercial view up, mean, such never three from was going better that? years why a is Why -- ago; I the level that we're high X's get and Class to that more watermark? we will

Leroy Ball

shipments become coal term overall look so or little if months I the at trends, piece has last longer have bit think of the business. up you know I Well, again here coal lower -- but XX their a as -- within still been a much

tougher And view a lot hard regard by intermodal to of get driven takes shipments the basically ratios replaced is at their their taken some that more track they've by of has intermodal it replaced and so down, been as on in operating -- haul wear a shipments and worked they've or network. or try the critical least heavy the

I a and tougher you they to the I allowed they with about an get to decide is hardwoods seeing confidence more come less numbers keep and hands in to it's to demand more replace. this think some down. commercial we get the down technology up talk only worse, even and inspection is some on side, them And with intense has of going to think time little maybe the I not though tougher bringing in replace many the X not of down, they continue the pricing. to leftovers are infrastructure. get your end cost a on get And going to or on going what is, better going think as had which of what Certainly continue are it's their to it's impact on has pressure trying what put to levels lot all the and improved going technology the they're Class market cases says decent -- at on to focus

as up in market enough tough there so the be there supply crossties is. on to get your to three it And pricing because just pent-up that to able it's to hands -- moving basically market and is on it's some demand

Chris Shaw

basis And then Stickney? is just for the what's other at benefit the one? on annual And naphthalene what an plant expected new shutdown cost -- the

Leroy Ball

only the that taking a units realized run day. we've point gone of at they're already so is naphthalene operations or more car less of process plant significantly; down because lot through a Well, a that this their basically

we costs, -- people So on logistics comment you costs do some have some Mike, have want what you on to that?

Mike Zugay

product moving a will we logistics a around U.S. and have of we start From CM&C from cost because fully standpoint integrated different one Yes. in the plant facilities. couple can --

the that integrated having should alone. $XX in within savings of lot million million $XX any million with that latter for part an moving Our where that -- and of the range. in on the again, most but that of only, range, in to again to plant that mentioned, Leroy $XX specifically fully versus annual basis be product see savings not And annualized the going products initial we if going million XXXX just those facility we're logistics XXXX a logistics cost part around $XX to as where estimates forward were one stay somewhere

Operator

Leroy conference closing question-and-answer CEO, concludes President to to session. I over would like This the remarks. turn and our back now Ball any for

Leroy Ball

understand delivering to you we your and your and Koppers the on in Have day. performance, strong to for everybody everybody taking for thank call. we great continued want to participate support. I committed today's a Thanks time remain interest

Operator

The now attending has for presentation. conference concluded. Thank you today's

a You lines. disconnect now may Have day. great your

Koppers (KOP) 12 Aug 182018 Q2 Earnings call transcript