Page 1

KOPPERS Koppers Holdings Inc. Reports Third Quarter 2021 Results November 4 , 2021 Sales of $ 424.8 Million vs. Prior Year of $ 437.5 Million Net Income Attributable to Koppers of $ 10.2 Million vs. Prior Year of $ 75.6 Million Adjusted EBITDA of $ 53.9 Million vs. Prior Year of $ 66.7 Million Diluted EPS of $ 0.47 vs. Prior Year of $ 3.53 ; Adjusted EPS of $ 1.01 vs. Prior Year of $ 1.64 PITTSBURGH , Nov. 4 , 2021 / PRNewswire / -- Koppers Holdings Inc. ( NYSE : KOP ) , an integrated global provider of treated wood products , wood treatment chemicals and carbon compounds , today reported net income attributable to Koppers for the third quarter of 2021 of $ 10.2 million , or $ 0.47 per diluted share , compared to $ 75.6 million , or $ 3.53 per diluted share , in the prior year quarter . Adjusted net income attributable to Koppers and adjusted earnings per share ( EPS ) were $ 22.0 million and $ 1.01 per share for the third quarter of 2021 , compared to $ 35.1 million and $ 1.64 per share in the prior year quarter , respectively . Adjustments to pre - tax income totaled $ 15.1 million of net expenses for the third quarter of 2021 , compared with $ 5.3 million of net benefits for the third quarter of 2020. The adjustments for both periods reflected non - cash effects related to LIFO adjustments and mark - to - market commodity hedging , while the prior year quarter also included costs from restructuring activities . Consolidated sales were $ 424.8 million , a decrease of $ 12.7 million , or 2.9 percent , compared with $ 437.5 million in the prior year quarter . Excluding a $ 1.7 million favorable impact from foreign currency changes , sales decreased by $ 14.4 million , or 3.3 percent , from the prior year . The Railroad and Utility Products and Services ( RUPS ) business experienced lower sales and profitability than prior year , primarily driven by a continued market shortage of hardwood production for untreated crossties as well as lower volumes for utility poles , partially offset by commercial crossties and rail joints benefiting from higher activity levels . The Performance Chemicals ( PC ) segment reported lower sales and profitability against record results fueled by the pandemic in the prior year quarter , primarily due to more normalized demand in residential remodeling and higher raw materials and logistics expenses . The Carbon Materials and Chemicals ( CMC ) segment delivered higher sales and profitability compared with the prior year , benefiting from a favorable pricing environment attributable to strong underlying market demand along with an improved cost profile . Throughout the third quarter of 2021 , each business segment was impacted , at various degrees , by key factors such as higher input costs , raw material availability and higher transportation costs as a result of inefficiencies in the global supply chain and a tight labor market . President and CEO Leroy Ball said , " Koppers third quarter turned out to be a microcosm of the varied challenges that many companies are dealing with as a result of the pandemic . We believe the issues are temporary and not a material threat to achieving our long - term strategy . Supply chain challenges and rising input costs , which exceeded our expectations going into the quarter , hampered both sales and earnings , with our RUPS segment experiencing the biggest negative impact . In our PC segment , residential preservative demand remained soft for longer than we anticipated , limiting our ability to absorb the shortfall . On the other hand , our CMC business performed well despite logistical and inflationary headwinds , reflecting the positive impact of our pricing actions as well as our efficient operations . While we continue to work through supply chain bottlenecks and the various challenges of working effectively while safely navigating our workforce through COVID - 19 conditions , implementing continual cost increases to the ultimate consumer is our most significant near - term objective . We have systematically raised prices in almost all markets so far in 2021 and plan to be even more aggressive in the fourth quarter and into 2022 to ensure that we are recapturing full value for the essential products and services that we provide . " Third Quarter Financial Performance • Sales for RUPS of $ 186.9 million decreased by $ 4.1 million , or 2.1 percent , compared to sales of $ 191.0 million in the prior year quarter . Sales were lower than prior year , primarily driven by decreased crosstie treating volumes from Class I customers , lower volumes for U.S. utility poles and maintenance - of - way businesses , partially offset by higher activity in commercial crossties and rail joints as well as some pricing increases . The procurement of hardwoods for crossties and poles continues to be challenging due to increased lumber demand in construction markets . Operating loss was $ 0.7 million , or 0.4 percent , compared with operating profit of $ 15.0 million , or 7.9 percent , in the prior year quarter . The year - over - year decline reflects a LIFO expense in the current year quarter compared with a LIFO benefit in the prior year period . Adjusted EBITDA was $ 10.7 million , or 5.7 percent , in the third quarter , compared with $ 18.5 million , or 9.7 percent , in the prior year quarter . Profitability was unfavorably impacted by lower untreated crosstie purchases and lower maintenance - of - way activity levels , which resulted in reduced capacity utilization and higher raw material costs , partially offset by pricing increases . • Sales for PC of $ 115.2 million decreased by $ 32.7 million , or 22.1 percent , compared to sales of $ 147.9 million in the prior year quarter . Excluding a favorable impact from foreign currency changes of $ 1.5 million , sales decreased by $ 34.2 million , or 23.1 percent , from the prior year quarter . The decrease in sales was primarily due to lower volumes of preservatives in North America as wood treaters continued to closely manage inventory levels given high lumber prices and consumer spending shifted from home remodel and repairs to other discretionary categories , partly offset by pricing increases for