KOP - Earnings call transcript Q2 2021

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Operator

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to Koppers Q2 2021 Earnings Conference Call and Webcast. At this time all participants are in a listen-only mode.

Following the presentation, instructions will be given for the question-and-answer session. event recorded. today's note also is being Please At call over I'd like the conference to turn to this time, Quynh McGuire. Ma'am, please go ahead.

Quynh McGuire

good Welcome quarter and of release earlier We you, morning. McGuire, press Quynh Thank Vice issued Investor our Relations. earnings to XXXX second today. our conference call. I'm President

may You www.koppers.com. it our via access at website

in financial statement of this calls, X. call. announcement, will comments in X, be described that Act available XXXX. forward-looking is At our may the achieved. in release as achievements performance those materials In Litigation I in results will included cautionary replay the directly the and a statements Consistent indicated is would our Securities like website, assumes for of light of the may call live The website, website to conference The our defined inherent financial risks company also measures actual non-GAAP posted provided direct which to and its Securities differ on such The projected non-GAAP These the through in Commission. information time, your forward-looking measures. to reconciliations its any and the uncertainties, the should to as on company's conference expressed results, will our comparable objectives, made with such to disclosure representation under available has made on forward-looking Certain most call. statements and of seen that company's from References also in regard forward-looking company's our included in today's prior or and of the not on attention Reform uncertainties statement, including Exchange inclusion XXXX. being filings on broadcast be this As in be a during November as website forward-looking release, of we've or be number Investor this update this statements. risks may certain characterized no to financial today with press with Private practice plans Relations you quarterly company in measures. made page obligation the our statements GAAP press of materially referenced call a be by assumptions, involve implied significant comments, this forward-looking the Slide our statements our recording

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

Leroy Ball

Good a X:XX XX, Quynh. Slide start Thank September upcoming in where Pittsburgh be Monday, starting everyone. morning, you, X our on there's a.m. Eastern Investor at on scheduled We'll save-the-date Day for to Time.

an be down regarding current so comfortable this option you will event. tamp there joining feel enough that meeting that we COVID to remotely, hope developments the join in while Now the us enough for person

we'll closely event monitor in safety course, with of Invitation appropriate to safety have in the details will specific place. continue COVID-XX guidelines coming the pandemic, Of we'll regarding the distributed and be protocols health weeks. and

remote providing also to attend. we're mentioned, option as Now

of We'll with webcast So be will be the virtually, event opportunity audio virtually to Day slides. following our presentation. Day participate a Investor an formal presentation on provide the website to through video, also attending there a for following Investor webcast live in event. and the those accessible question-and-answer And will also real-time session the include the replay

both strong away. can keeping safe so our Koppers Slide as they home keeping in on transport Now role, power continues essential and helping businesses let's move an to to provide reliable, and and goods, critical to and railroads to infrastructure homes and serve such connectivity X.

economy take to team do keep global part our proud moving the incredibly Our are to members and we seriously, and this responsibility growing.

Zero individuals also requirements regardless all, red updated or be or employers guidelines, to county-by-county new our outlined COVID-XX. Harm rise and worn Control effect from to updated in Slide high guidelines suit, others. at which public is or due adhere take based shown rate, been mask let's returning lifesaving same and they've the a Health Disease to has our we've employees which to our of the mask in in by X. variant. indoors, A guidance details by to in results, been employees is These Koppers at disease they've distance activities applicable of and The as vaccinated adopted recently updates for directing of Slide the whether must is significant transmission on fully, with counties look all already and Harm as rate, these them followed orange, the communicated high rates, are Zero the have the reflect described Administration whether means significant U.S. the employees Center of and for Occupational role unvaccinated infection by office. driver on partially mask Safety must In locations. CDC's wear primary must Now X, at each masks to COVID-XX which our social these changes all rates. on now or and a infected vaccinated employees a from environments The not Delta indoor requirements cases measurement

office. people safe. to we lead do termination is including to COVID violations to away rates ranging their employees employment. of behaviors at our alone practice actions vaccination to with our Intentional quietly to good to if disciplinary in keep mask, from to not and not going need vaccinated continue XX% rules Unfortunately, However, XX%, locations life-saving up and of need anywhere could

workshops. following news, reaching to Slide frontline a seen we've Another directly training rolling pandemic, Zero in-person Harm of begun delays out the Harm due as X, on employees Zero by series

to in been sessions Galesburg scheduled classroom our Guthrie the field. first One frontline structures in in came and the employees with with the trainings the when as conditions the every unsafe always conducting time The is is intuitively actively always, third of more setting also trainer and Harm have for practices, an for prevent employ Zero area, quarter where and remainder spent but looking both and illuminate members an placing safety of to and and other illustrate mindset, first. XXXX. and instill Chicago out examples exposure specific workshops, idea, in epithet Similar to team to our steps railroad a conducted

were in featured the in strongly video neither expert with video to with with continue effectiveness. partnership of two speaking Network We and are any physicians, vaccines and whom about safety their how Pittsburgh. special Koppers misinformation are promote in vaccinations, Allegheny a employee addressing the here way, Health affiliated produced developed in the

sharing help concerns any to in is video hesitation population. unvaccinated purpose Our employee this or overcome among our

the on employees Coast our and of continued to Koppers incentive Ashcroft addition, $XXX U.S. their another to and recently devastation the vaccination evacuate. In Canada facility, in note, the place. have On our came forcing remains West wildfires close

for relieved We're The our down the through amazing, XX them can past XX, are apply like won't on to so of days people operation as you superlative facilities other and men Wildcat of for and you'd if Services that want happenings adjective what Fire our was Slide Our us every and total arrive have And thankful any fires and safe. go are to heroic through and we number do are personal safe. them. like. Wildcat occurred you them quarter. I did other a a for notable services in to that On team our in they XX and women keep time, fight detail, the members that of Ashcroft fire have your

discuss So second meantime, turn the would to the quarter to Mike results. Mike? in the over I to like program

Mike Zugay

Leroy. Thanks,

start RUPS at down sales Slide came CM&C sales $XXX $XXX million, were from from $XX million. sales $XXX $XXX year. million, sales up were Let's from million, shows million. increase million an PC for XX, from the to and million, million, in on Sales prior consolidated $XXX rose in that $XXX $XXX up of

Moving and $XX on year. XX% was from approximately EBITDA down in $XX up for prior $XX Adjusted EBITDA to to PC for up million, CM&C EBITDA from million RUPS Slide adjusted untreated the from million, prior purchases prior because for million XX%, $XX This and first $XX the to with to up was million Compared the million. the year. lower or improved quarter million, customers million. or RUPS increases $XXX EBITDA million in to declined Class XX. deferring sales of $XX $X year, rose due from primarily On $XX associated and from was million, of $XXX were volumes shortage I XX, price temporary crossties. treating crossties Slide a

to by increase an sawmills the serve partially were crosstie business. their lumber. offset capacity shifted higher decreases These construction disposal Some in demand

copper to achieved was for remodeling of volumes, higher for in This which lower were compared in QX. Utility The sales quarter which due million we pole treating the in in the sales RUPS year-over-year primarily carbon Adjusted on of EBITDA in America preservatives at tightly was positives with QX, be due $XX CM&C costs was million prior were by of year. can lumber for sales compared and was prices. transitioning adjusted by XX, Australian Utility Slide experienced XX, in million a spot $XX $XXX higher compared the PC for Europe business, material XX in lower pitch in Slide margins pricing plant and in to higher bright material volumes managing million programs the Australia. driven sales in home North our increase million anhydride Also A Summerville, for On our America, to facility Slide offset On the in by $XXX Europe lower raw million in our treating $XXX Jasper, higher to quarter Americas. compared $XX pricing was of levels our lower partially experienced In and as caused XX. lower the offset Moving feedstock absorption lower year. volumes, North high the in treaters with from raw volumes the repair reduced impacted by for demand to North Slide as price year. prior PC phthalic was sales production the – carbon in in fixed profitability. ongoing million hedging shows continued of as international strong America, pitch lower Texas strong and due Texas to copper-based prior increases in year. lumber million result profitability resulted strong higher partially The in our temporary sales for a attributed prior These well the $XX former to which segments. quarter their plant. EBITDA inventory to volumes costs black outage, We cost. business from pitch in $XX

product higher Moving on year. in $X by the This the quarter compared strong the demand, CM&C was efficiencies profitability certain pricing in to and Slide million of favorable prior $XX for operational markets, proceed. in an XX. Adjusted was increased to EBITDA receipt million driven insurance

drive demand recover, cost continues our to As continue efficient higher will to margins. structure

our and review let's liquidity. Now debt

As of seen million debt million Slide the with we end June, had XX, of in on net at available liquidity. $XXX $XXX

be We debt to $XX X.X times reduction year-end. for continue project ratio at debt debt remain million net and expect compliance a significant XXXX. XXXX leverage all by X.X to with We no comfortably maturities and until of times covenants in have to

information, three decline net the continues ratio be Long a times. times times to between back net also and down at goal now term, over our that in June X.X two times to quarter. Our Leroy. XX, year prior X.X leverage it XXXX, from December With to and significant at turn dropped times it from leverage I'll XX, showed X.X

Leroy Ball

Mike. Thanks,

to little suppliers. our and business a color segments, bit feedback includes of each on our our from Now more give some I'd customers like which

while is as we people the back point some Performance pick knew at So lumber from was a on in contractors PC, for in record actually that coming are to expected EBITDA began to pulled midpoint X/X to May of a from near from as are more U.S. EBITDA peak was that starting and treating is going still sales being The a their mid-May, their lumber DIYers pronounced and finally XXXX QX to we're back descent. occurring XXXX help in gradually been pandemic system has exceed in currently. their offset told precipitous effective and at and get themselves their next North our futures treaters sales led the and is activity began peaked did our perspective, heavy from quarter everyone of expected Also, our more we Lumber to bottom they the push trading as industry term. what of things the with far QX provide while forward dropping we're on where currently which QX the to are pricing And demand correct increase that moderates, and at in find will as the their inventory push on little demand according seeing XX% skittish but market on period their treaters mouth in the trying up demand you we're to vacations, can backlog month. the inventory market. buying drop has we in hand while never even generally not favorable within then moment back. the of Slide same, This adjusted Chemicals of thus time, June as and XX. high-cost And replenishment, and a to or wrong will markets, working To business near for international drop side it's be some a so some America the results, a to quite this retailers through on of contacts, curve. of are reduced seeing entirely see certain, projects. and and

in year year gaining seeing of overall increased sales macro all National our home new volume X.X% and remodeling surpass than PC by major seeing consumer standpoint, this favorable highest double-digit customer the reach marking from we're with at that X.X% May, indicator with XX.X%, the investments regions the of level sales of present XXXX. year-over-year benefit stands in second XXXX, mid-XXXX. an consolidations continue year. to billion higher since Realtors. spending market Association The annual experiencing support in business that From and in this to $XXX And Existing four overall. capacity trends according terms our growth quarter in growth June fourth to by on by half home gains states Consumer leading in In prior repairs expansion. U.S. should supported activity growth It expected continued robust February will the July, of the of XXX.X, into we're Confidence XXXX, share, renovation spending of Index economic

Looking Chile, international regulatory to PC we markets hedges do expect continues on issues. like higher working sales copper overseas Slide as expand in to others, mid-XXXX and We We're relatively deal and the and with current Europe protected to costs year-over-year be XX. in remain chain Brazil at but even markets with place. supply for beyond,

be in business during the then our Texas has for to the levels a exited of build We've our if Jasper, bring our beginning on to Texas lot of UIP happening. of pole there's treating we Texas We hard Summerville, highlights Slide production agreement increase copper does shipped business, which price poles Now organically cost. Summerville to plant adjustments out XX of decline the as not need our are plant. account operating the pricing to quarter transition significant pre-pandemic our upside. over the and into effect the up TEC a to second where working lot year, for first will market, been put in next

to U.S. sales demand expect being transition. and to were Australia but the some likely the displaced, in limited this strong is throughout low-margin sales business. will news remain balance the Texas that year, of decline experience good The we our are due We

the building among wildfires year fuel the conversion CCA the third-party increase. also projected wood inflationary production costs and facilities And market as ceasing transitioning to of due the for of new by a increased with and penta to for up behind of begin utilities U.S. progresses. but as such, to rising utilities has and infrastructure a year-end, is Penta an aging us our catch Mid-Atlantic Demand to capturing new transportation a upgrades to we're look increase fact interruptions, work to end solid people trucking. opened pine number to among a we for to provide our business middle preservatives to quarter curve brought on, business customers lack grid for Australia, treating as focus need our Alabama Wood remains to were pass provided and pole of our are up alternatives. is up business with in project improve availability sharper availability cost pandemic. in to up be lined from as should year opportunities hardwoods spending one Australian and by We're other service experienced. pole this plus their EBITDA share network are improving to increases converting broadband will remotely. need the strong We ever advanced our has infrastructure, opportunities. currently better the years should also market the to the pricing work Piling it to Vidalia, the infrastructure Summerville. There as with as maintain steady by additional In is We're Georgia poles have and that preservatives. choose this delayed by the of is into need plant online benefit poles expected region, have costs diesel utility therefore, our conversion demand up working the of even plant, opening next. for a more back And of of of which at supply factors of avoid from contributing for So bigger utilities book and construction and lack update that shaping currently

last was quarter. and track on an railroad phenomenon demand produced for patterns. other pricing to by to on our get on to We've would as where to we'll more experienced either products adequate of work in where compared effect the in less from online levels I'm up the done had their has XX the about out business generally some has products X. it's Slide has and The effect services a supply normalizes, of XX. point XXXX pessimistic of combination a and of it fuel pandemic with it for buying pricing the sawmillers is years, crossties material I crosstie as I couple untreated business say XXXX up a over negative the our pushed as to seems, portion market more Moving ride times affected year for getting moved a or this this positive seven to every pandemic moves demand traffic need to past

Now plus but still on into our at itself, temporary, not a focus work XXXX utilization is to should Little but see this we contract is on Rock, plants side, we into in will we'll correct made improving plant, until the have XXXX. the North some expansion to facilities. We're seeing probably in XXXX. and early we ongoing get delays I tremendous at complete believe our those progress on securing which Class due that continuing with renewals Arkansas Feeding is be substantially and COVID, out

Class as business Slide the been world and place, in costs vehicle the in introduce margins supply crosstie we a lower expand the recovery value-added expect railroad line the capacity, factory half year. a favorable tar Nonetheless, I growth and CM&C and expect strong our delay Materials for segment, grow to Slide margin our The along certain a improvement strong. units other second see industry X.X% The added maintenance-of-way Tie to longer Railroads in growth total not Railway the XXXX. we've improvement to increased and evidenced catching four and relatively industries. industry in and Light than projections with we year, the slight Koppers data We're operational the in million consistently XX.X% for pandemic. American This accumulated further semiconductors until to auto, where steel efforts investments growth vaccine for and significant pipeline increased maintenance-of-way This projects is to in XX, lack XXXX. market. model – of those more EBITDA reports lack members and our turnover workforce the adjust another and units or for Association, have as this Japan, are business of crew our accounts, market term. and be carloads crossties Association all expected second the Natural continuing with throughout With opportunities for carload able profitability demand that around market Carbon services, the area million to pre-COVID better up to In or labor for to and in made and to technologies aluminum combined efficiency. where expected increased cycles, provide in hurt North XXXX last mid-teens IHS Chemicals delivers X.X%. customers. EBITDA strategies preservative second overall business to and to intermodal growth, at backlog well a additional U.S. AAR semiconductor percent efficiency On driven more including XX.X%. The segment, to these to anticipated growth from structures a of significant early combined economic with central levels. address year shortage Intermodal XXXX year-over-year black XX% have working carbon of Markit, by with now, of by outlook wood according improvements. of XXXX adaptable experts conditions. our as XXXX, For traffic new have railroad prior a as XX% outlines increased to fire manufacturing, EBITDA thanks but production is the commercial that year through a our disasters areas $XX.X continues issues various America, X.X% and steel, in worldwide half resolved. performance are supporting quarter low various network $XX.X a challenge. example, expected has demand COVID-XX but in expansion of the in as is higher a spread XX personnel thanks this production remain we forecast We're

On pitch export tar markets to to due is America Europe healthy pitch demand and Phthalic recovering for where and along favorable. end higher down due will and pitch are continue high. demand are short and overall market well call demand However, from importing is is strong anhydride from for RUPS our XX% levels, from tar top line two for last our meet oil Also XX, from our compared while prior biggest to compared EBITDA In end market customer and are demand. quarter billion pricing and $X.XX European RUPS Slide absorption normal high expected on a the positive impact back this for remains to negative. prices pricing is three to demand over million XXXX year. factors, describes the of year. EPS to $XXX year. prices availability year, from healthy strong share billion from in pricing relatively now. industry. per adjusted anywhere a our our price prices combined to increase prior PC change in XX percent XXXX ongoing black quarter to competition up demand $XXX is or naphthalene costs. XX, unchanged footprint a naphthalene in corresponding sales EBITDA Australia, we $XXX to return favorable untreated increases, estimate quarter's to XX, its supplies Slide conditions to $X.XX improve These we're the percent forecast tie from with macroeconomic the Europe, prior the holding as normal to and favorably projections range streamlined with lower pricing orthoxylene of reduction in CM&C sales the is compares adjusted normal and guidance reliability increase in XXXX, in $X.XX. to relatively to in year's Southern of global $X.XX in to of an our of expected CM&C The is market and and supporting guidance and facility million China Due with year Slide prior the dynamics, as – CM&C improved range the and with drivers to product naphthalene percent and due due On and billion higher On and demand, and to reinvestment million CBF to carbon are of to be see Stickney tar to portfolio EPS could is our remainder North from while a reduce CBF. in prior Pitch our demand and benefiting Slide $X.X both while oil and support $X.X for purchases and Central guidance seven

six to term. of financial sense performance a to of net cash trying that and to of $XX.X or Slide are remain annualized to expenditures expected proceeds. the generate half the this were significantly but on-track million amount million now and better continue on June in $XX Finally, year-to-date I continue net projects to to on our to impact make expenditures, that of we're of effects growth the to in productivity markets still million digest first $XX dedicated our the spend XX, through capital through confidence $X longer million of year, capital have XX $XX $XX.X for that we're months ability In with in million, of million deliver benefits. We pandemic that summary, $X.X ways XXXX, to million the

the by generation opportunities the focused about million up we how questions. to remain I our Day. EBITDA Beyond model, $XXX integrated we for to to our that, September forward at can it XX XXXX business looking Investor continue of take of open upon we details build further will over this believe I Koppers on excited end the of With upcoming to have year, and many sharing wooden infrastructure

Operator

Our Global. question first from from Please Seaport today [Operator with Mike Harrison ahead Instructions] comes go questions. your

Mike Harrison

Hi. Good morning.

Leroy Ball

Hi, morning. Good Mike.

Mike Harrison

talking wondering It about demand really negative American in It lumber maybe pick Performance the you the lot revisit get peaking the some leading from destocking. of going or some there Chemicals from saw of decline into U.S. even vacations or May of a price volatility as least are seems like the you the impact volumes expecting was to whatnot, we up business. you demand your into North summer I sounded we on guys at like could and to if there's though themes between kind this people and June. come back fall

and North how in levels into if bit I us give about – year and a little into maybe activity next there, color So North right you're talk could guess, demand you feeling more remodeling America now? underlying about

Leroy Ball

I'd a haven't people of do to knowing that everything that Mike. the the how that pricing described drop be a we're And right? I a coming point things to North got and it point, up reached you comments, ride at basically would time, this year. the how whack, it over not be, just right? some fast. where Sure, a to would in I seeing at and what – But guess, them, think drop knew moderate described – in opportunities and far so right, point not nor in opening do been provided some is top, able that have things continual America, things. they which in how And out little we we was It was how we knew started that's Yes, could to say prepared

of into projects This summer think, when have else higher at to nowhere its drop money. your starting year, done with to to there options, you're I combination sitting as led head nothing do prices started the and other lot and what season. So it's easier spend is to home a we else to pricing ultimately the

that to traders a your a more going can where tend some a sidelines again, feel we it four they about of they begins years see stability over really we've that comfortable, stand this And more you like reach on the when think, quarters. until lesser When we've talked and level to and and see I in back the lumber retailers little little did the of this bit out your building So to happens, bottom markets drop, seen, inventory. increase see last or a much rapid whenever degree, back. a couple

treated to afford second quarter We've market too significant in already companies during had significant is that get inventory of that product So levels in they falling seen you where the the with due that that have write-downs to several there's hand. in industry a drop higher caught on can't the much might significantly. took

as So the higher back and pulling through that obviously, push its us, system. way trying they're cost to their works treating through get inventory back on

in of the is parts price way, makes that pick back projects. again, people, We vacations July, oh, believe, home, people from of season saw as of it activity to by August. the is projects that, back we've backlog people conducive and beginning temporary exist summer saw lot or some with rekindling for – get is we're the over we we June. get Again, half and phenomenon. And a starting little we – dropping up. the to ends, of it told early experiencing school, some So half in this activity more are to resuming already been lumber What of their it a in at the and kids that significantly, a back are see this

by We the coming last and up maintaining beginning quarter were up, the the So year. But ultimately we opening was forecast throughout the month, we some weren't we It's gave reasons demand one we market expect year. PC things happen the the quarter, the really I at do but to the little will for didn't catching of time of of in to when in into up pick we raising a baked remember year. end believe we wondering this terms weren't of to more our why point think time. initial our going figured our year, of flack this that again. is at residential which get bit aggressive continue and this guidance unabated of that we market could ended the in back expectations lumber the do kind with and entire people

for for it and pick things of see part of right we certainly now, we're to to one. significant time at good it those point we not companies have expect where our the guidance will down because of be had entire So able down August, as significant demand have the good part But is that's June, in It with it down we Mike. level, factored at a this do, it year. they've that for to was some that levels the July, I right, to least feel by but to up throughout fact and get maintain other reduce September

Mike Harrison

still demand activity like what going to it and the is point, to look remodeling say look next this early too year? at like in is could And

Leroy Ball

forecasts there is I has the is those did. fact moved some Yes. pricing I are way going that there – I maybe a to in are think, sidelines backlog assurance back still of going strong. more projects as greater the is even projects. pricing people a think down only And moved all the standing the I get up getting big mean, provide mean, on done to, and additive, it that again, were

year think some next market healthy. you I move to there's optimism as into pretty still remain So is that the general going

Mike Harrison

us and of Okay. internally? mentioned impacting business? sell Can you the into you that transfer other a works RUPS seeing costs. explicitly you you that transportation in your materials just back pricing I remind other RUPS you business, And your CCA guess, higher creosote what costs were I the have you material in but transportation, guys for you And costs, lot segments. integrated material how outside that the raw think And mentioned of

Leroy Ball

Yes.

that year-over-year, really XX% down XX% side, it's untreated market. to the crosstie product, on producing of in where the that the produce for it's at right? from are the willing anywhere of because have uses pushed levels price want millers untreated other For have market RUPS, what to That's which, purchases at, to saw you if they'll We're to again, other pay you're hardwood done.

the it's in really line general have reluctant to has to a industry, pushed bit. good in move aggressively general, up up the industry so crossties in market been the rail And And with that.

for moved a right, So not need own I'm certain would ground really or but some question truck, proportion We're seasoned. and upon trucking to Trucking, terms of do there labor, of what and in and rail, to air we're by trucking only on RPS. and able want be they – in there up. the both what pieces of third-party that labor, get putting to in get general, talking We our labor lot that's We're probably you're that pricing but and is is There's respects And an that in follow drivers, the an of that all have no in and the not about issue you a our that general do just do for we again, product issue. have it. we from are labor truck fortunate hearing about fleet in own across we companies operate is seeing. it Performance getting Much UIP moving fleet and we by board. rely gets moved for carriers to maintenance-of-way Chemicals business. seeing is our it

just right that So in getting the dealing ground. with it's it. we're the and to untreated share on worked is its lion's business issues now and affected that product But our of way

Mike Harrison

press bit mentioned repurchase free the currently Board now three flow to All establishment there. how that a the release the is little and target? I Can signal with the expectations authorization. right. was your from of more authorization still curious your on about regular a level a going Board you debt consistent timing think the last level a dividend times above cash against times two generation talk I about the repurchase forward? confidence for then for viewed And then And question

Leroy Ball

Yes.

it's flexibility door up – as deploy more repurchase I we've program. continued flow think different the reduce capital make view Board us to ways. opened a progress the to generating for cash to way for this in is a And that the more lot in there's opportunities solid on debt, our

So I we essentially as to and be Dividend, dividend recurring, debt to option we're decision, cash our think and that to of a we've an the extent that reduction. that, continue generation we where that's undervalued, give shares when to continue dividend you to decision things to and flow make progress this grow. our the remain at is the the to established those program but that us look extent, making option, overall make large make we to one when continue something expected to going the is reinstitute in

repurchase able take be feel we but easier So on that to thoughtful we – at we this we this point that not want approach – have we have it to bigger capital, better this, left that gives repurchase we given us one and if for to about how option we're a shares don't this point. a be to very seems if are to it, up as didn't obligated little lot feel whole share opportunities a deploy us the but do opens to on it program this window old at our

of sort Board's on comments my that's So view of our it.

Mike Harrison

much. very Thanks right. All

Leroy Ball

Very well.

Operator

comes Chris next with Please go from Our question Howe your questions. Research. Barrington from ahead

Chris Howe

to Mike announcement and this over on morning. morning, the Leroy Good Jimmy Congrats

And been up XX. of Slide on have here I questions kind some but of answered, my picked something

for your assets infrastructure of businesses, fund And other spending digital out well, talked some also being that improving broadband goes the that's perhaps we you've done repair, broadband investment of having opportunity spending bridge in the made before we your projected mentioned infrastructure there. rural and things some You in the consider other some as context toward as availability; sense have things funding non-core the kind like benefit there's of of et a about of with cetera?

Leroy Ball

markets. strengthening Yes. right, that model, a business that in focus There's around serves and on no going which infrastructure many, the spending and U.S. think, of that, the have I our with question, with on absolutely the benefit global many especially on what's those will here

they infrastructure, I each is that bills of really benefits Devil broadband, to the all in from our on that So details. business. The touch segments; benefits strengthen those harden certainly we'll there, the think and always UIP the expand from to certain business We see the in we'll see absolutely infrastructure efforts our expect ways. in

to it. bill many flowing should going passed the see key. the involved to money be be how positioned of getting to flowing our terms is is that markets where and those where going businesses we're are money of some in But So in we like seeing

Chris Howe

And That's segment. Okay. then to PC moving helpful. the

challenges You of opportunities external also talk Brazil. right like now about declined. Chile lumber sell-through have the inventory of some pricing in you mentioned you other and these markets and we today? some of can outside the mentioned with as the what prices market Perhaps, But the know

Leroy Ball

pretty other do strong internationally scale. lot just our our they're earnings standpoint. – to – because most we business, America it South of a a They're Okay. the time in down North But that share markets an smaller in of position talking can We're often cost we at but both are from American strengthen is, business I sales the the markets. lion's there. the nice business, and it about spend mean, we is as

capacity, And adding our looking capacity down own so in ground adding hard we're at on the Brazil.

that And in so XX into hopeful be there expanding next, producing we'll product we're months that down what over business a actually rapidly the XX has been market. to say, the of

So there's a lot of benefits there.

second-tier of On player – and the things, that's opportunities we European a have market where side to one we're grow. the

extended, well. all we market. stands really in is the hold and capturing it's And the look it into well. in America if that be it's about MicroPro not categories. as seen as – we've growth able and positions other in can North seen market, product of profile is for We share products that area make – additional to over up our inroads and Over market product get but change not way opportunities in certainly, and of a big selective that's caused it pick us out possibly strong here bigger move today. Europe. a America mature of looking world, there Zealand way, from to lot in we think Australia transition New a terms it's as at not a we cost hopeful our successful, South their in get there will been products, necessarily market in at we're registration of introduce business, What very our to managing really over there's a So we've and certain of and certain European registrations

Chris Howe

response treating of you're a just in kind The fruit about there's comments the I'm have the made some America, to the referencing past, the low-hanging perhaps Is different approach been you're that as have competitors of some there Thanks. that that in in for noncore more Koppers? part Latin business. taking of some what Okay, a – that business just market made competitive seeing their dynamics,

Leroy Ball

But of to Potentially. as I some down local base position, products, that's really in have but we for in to good us own terms some that operating don't well. that, improve technology, low-hanging able a and we I competitors have space. our may under overall pluck been mean, solid have of there the fruit. we think strong good really already there's control our But

America, an cost position. can move improving the so we we in market of area for really our that's just when footprint will to And market, business needle improvements overall is PC think the think terms meaningful be and it where And there a going again, because America you still of by be overall picture, North but huge that North are dwarfed such line. the

Chris Howe

Okay.

question, Just one then I the and queue. may, I'll back in if get last

seeing the with types we're across of that Just dynamics companies. all

soon in environment. quarter? there things backlog in seeing way push what mentioned kind labor orders the coming You other the terms you're the shortage the quarters Is of may – size and to of realized a dynamics pull in of is there come? and the of And how kind that impact in to how

Leroy Ball

are or market to? particular business Which you referring

Chris Howe

size there's were kind if orders environment business, of may a current on what the have deferred? Just impact the across that to way

Leroy Ball

tremendous impacted managers have really in we're in labor with for deferral businesses. time terms you're and say of in is magicians not – that of turnover amount really when really out. say, a core by have where in issues in us come it managing side mean manage I'll difficulty our that markets. some being on And maintenance-of-way seeing crews those as labor, take result because business in having the are we're with. of in dealing our us, experiencing just to others experiencing. a the But they to getting our labor operations we you're I are through some to and where of hits and and on-boarding we're getting roles, inherently orders spend it begin roles of dangerous lot We're makes Where able it incredibly difficult really to of plant that cases, got the efficiency training, you shortages gain a of any I'd momentum to and been Yes.

And them somebody, them just hire day on out throw there so bridge. can't on a you take one and

the wish plant profitability. on they're around that's impact biggest more So tell a one filled, And where other our they'll terms working probably our they but it positions talk certain efficiency seen to of managers, impact And amount areas, it. of they if hurts. any had of in you you we've the and

Chris Howe

my Okay. Thanks for taking questions.

Leroy Ball

Thank you.

Operator

from Our Please Riley from with Liam next your ahead questions. comes B. go FBR. question Burke

Liam Burke

you investment Good have the EBITDA. the the morning, you you CapEx $XX Leroy. broke follow timing? productivity-enhancing generate million us give first – Good will does future sense or Could through? of You put How that morning, been a out Leroy, a Mike. for out the half? quickly that

Leroy Ball

A second with you. catching up Liam, there, I'm

okay. So –

So locations. that our that million yes, expansion, the well kilns see of so that some UIP the Little to we've in dry of in as has gone you $XX outlined into that good North first Rock as we've a put portion a good the portion half,

year. kiln of standpoint, benefits the dry see start that in the from half to the So we'll some from second

XXXX. not Little we anything see we're until the to of terms that In North going out expansion, Rock into get on

share the what year. realized from that that's out EBITDA we those to next and year. be that to try making So is The heading expectation stuff – of of going this terms into in outline lion's investments that's we're

Liam Burke

a expecting Summerville poles. lower at product? that on – margin. sales is of you utility of margin I'm those consolidation are Okay. out to – the mentioned sales capacity better the Great. full If affected combined mentioned also the you looking were that that plant activity, And lost the see there you was But

Leroy Ball

Yes, no question about it.

So model we Texas that were a that location electric we and for were co-ops, Texas was site operating one Texas. operating business Jasper, where in the was the in

it that the so to in limited – So plant, move world And ability there. right? the made us, facility. our the own ground levels had in we that sales sense doing on at our treat There on production the crossties for and already were be profit were running we to assets Summerville; through all really have we up

extra cylinder and can of economies space, have gain there. we some We scale

moving particular of own up to using already ended in at we try out that have and our So business place getting deployed. that's ultimately arrangement we why that and Summerville book of and build assets

continue economies to book gain business scale benefit and build the some we'll there, we'll from margins of see So of as that operating a we as and location, own volume and result. better our Liam,

Liam Burke

you, Thank Leroy. Great.

Leroy Ball

Thank Yes. you.

Operator

Monness, Please comes Crespi. go with Our Chris next from from question your question. Shaw ahead

Chris Shaw

Leroy. morning, doing? you How Good

Leroy Ball

Chris. Hi

Chris Shaw

Ask demand ties there. the were prices call quick like that prices pretty before side lumber couple this all. happened back railroad said – suddenly? elevated I business. that ties not a specifically Were I really at about guess, Was things, for guess, little lumber expected you happened first terms this around of time that that A in RUPS, causing, of of last in has seeing or a bit mean dip you point? untreated the and thought it not I that on high then I quarter

Leroy Ball

other. because can't the you in hardwood with they market sync each always don't run the confuse so with market, Well, softwood

for been millers more softwood cut prices that of going has going to because a caused what's the those it's be fact, market, elevated the to what's saw greater greater In on softwood really in at in incentivized hardwood pushed market really has demand created on a product. more – by

the to first to first pay was say in extend our changes actually, blip We something and volumes to product, about ago more. a result that parts from from result be our year rapid short-term that compete all of the downs what up to We get starting to of again, having cut And the of and end we longer. the bit hardwood early come that sure, again, it quarter whether that was going pandemic to talked down the to be and I'd did seeing a a of see the so quarter. And was little prior weren't to them – were it. going a that or you're as impact. is might quarter, the one as with we change with now in that sort ups in that

experienced the we've certainly, so through into this here third. quarter second And it and

but so the much part XXXX, hard change. fourth and has normalize what pick we by trying the to So start can because figure is to as, into difficult out last head changed while experienced the things the again, time seeing from quarter, into been remain so continues to is start time shake even is trying to year And things it's to what going take by what predict. short-term just But have for normal, market that maybe to a nowadays, right, a we we to And we'll out, shocks think adapt us do bit. little to this do we're get them. we've agile little we up the

be ways have to price for. product we're that be are to going to folks forward untreated secure that – do it working we know moving for And so our we and compensated market our can at on can try a that competitive and we

from the the out with control the the we're trying we in don't we is to So get is, always And it's the for opportunity. part, balance risk to decision cost it the protected most don't as the we product. downside a and market, about like go control but – always standpoint, this all fact that

Chris Shaw

you beginning they it are – the – think does here, said the update been And Class your of then drop the did is and the the happening different those, the the those sort for the And has at secondly, of is there; coming for said A much it any ties, mostly, demand board? or RTAs from pretty in commercial should between business. across year? couple mostly, what's all the I during before, the has untreated the things this you be of side I, forecast for has year, commercials in as RTA the growth growth

Leroy Ball

Yes.

is commercial do business the decision are year. the sales with throughout and six So while put making we side plus price of most our whatever product ties a on obviously tie at buy that's Where the expectation the nine is that commercial and update time and an that you the that are to have And we that period months of differs on ground on black recoup things. to where they part the out it the the the going for business model air ground margin can drying. of those

moving an we that to opportunity in be up have that more So in get we price to aggressive that the we market do extent can in pricing. think

from of the getting willing things from side. We where the will to to they a support through We're to the business commercial Class where the help haven't still yet start still be pricing standpoint. seen justification higher be that that as in it half been. pricing of side want. black We're I, a want in even where sort the back model tie of of untreated they're move which thinking on back as what But to in in terms the we'll move to up, terms as state, untreated here process relates the somewhat see giving bidding of has come forward that the year, signal they as they're them signal protected untreated an of or to on

buy our ultimately use so we And basis as ties. go the and that to out

a supply I of see of on some some think We'll commercial once up. a healthy it's enough move pricing see also So different untreated the side we'll and in way, dynamic, up we see that. pick the

Chris Shaw

any all remind bigger that on think year about –assuming in next then and talked do – $XX have you my forgot, And is what head you the you investment at it. guys CapEx, I XXXX? million you for projects have just I core, for capital Got can growth me maintenance

Mike Zugay

From perspective, I after million Mike. for CapEx that on per we in from get a range normalized maintenance is this from and maintenance perspective, XXXX year some think $XX XXXX that improvements they capital $XX Chris, to CapEx. basis, in away have we productivity were a of a million these

Chris Shaw

much. so you Thank Great. Okay.

Mike Zugay

You're welcome.

Operator

Mike next with follow-up. your from go Harrison Please is Seaport follow-up a Our ahead question from Global.

Mike Harrison

of Yes, for me. ones a extra couple just

Can an recovery business. CM&C much in First noted of you all, the you was? quantify insurance how that

Mike Zugay

of is Mike, beginning most a of had in loss bit in April $X.X production was the the little Mike. in quarter. was That this we in Yes. into a – extended about of million May. quarter What and transpired and late March

the helped and negative of So XX% we had QX, we insurance have had part that us. about in latter loss basically total, in and QX profitability. losses – that a again, reimbursement. in $X.X In we was insurance the QX reimbursement It's what of million about a

$X.X insurance million $X was dropped about program, we X. around right a We the have half of on a little over million expect. our deductible that what which And down X,

February, We year insurance or may be in expect XXXX, XXXX. in go January over to reimbursement it late this the although other of proceeds the either half that into

Leroy Ball

And to that Mike, be or we that replacing we essentially because clear, month was a is as that part about lost the recovery – so. profits of plant just for down

that was plant are were certainly result incurred time. period of during costs that was there There time. being that that a the of lost as during So period down of business

if one-time to a you It plant to of sort it as don't replacement profits – was think down. it being is So view as – think of you lost out as we of result that I have that a – item. we'd that pulled of want don't a want I a

Mike Harrison

out definitely later be if more year, a the of it's covering you had, period. you loss recover that going in So it's but some to

That sense. makes Okay.

Leroy Ball

It and quarter will additional were period. well again, our second quarter. we normally some been as take be not running the event first there we as But been did – the out have would in that the quarter, place, in would the have if have profit were

Mike Harrison

expect offset of be Chemicals and just mentioned update ask costs, maybe on the to it. I to next costs question margin activity by starting should impact copper I business, Performance Understood. guess, last mid-XXXX. copper for would place? Got your And pricing the some maybe higher year the you about, how wanted in we copper that an about you be then to hedging higher expected put in those in maybe think

Mike Zugay

P&L this. XXXX averaged ran me through Yes. let price hedge pound. about The a that take $X.XX in at our a crack Mike,

the all XXXX. to statement been P&L price throughout income hedged dropped XXX% have year, that through And for We the $X.XX. running

we're as our us that needs is to XXXX. actually XXXX a that hope for are hedged the hedged pound. for tailwind XXXX, So And hedged. is because a $X.XX a again, that creating XX% had price $X.XX well a In we pound. tailwind have to a exposed hedged. not we're But in XX% I little of $X.XX average for XXXX XX% to from pound that about XX% in XXX% Again, currently price we helps.

Mike Harrison

Yes, thank helpful. you. That's

Mike Zugay

You're welcome.

Operator

back I'd gentlemen, and conclude closing today's for question-and-answer with to remarks. to the like And ladies any session. Leroy over we'll turn floor and that, Ball, President CEO,

Leroy Ball

I participate appreciate continued just want thank the today's you Stay Hope everyone to the for taking your really at call. see on Investor to time to in interest safe. in Day I Koppers. September.

Operator

We presentation. and Ladies you today's conference concluded. has the gentlemen, not thank attending for

disconnect. now may You

Koppers (KOP) 7 Aug 212021 Q2 Earnings call transcript