Good afternoon, everyone, and thank you for joining us. This is the June 2025 Sidoti small cap conference. My name is Michael Matheson. I'm a Senior Equity Analyst here with the firm. Just a couple of housekeeping details before we go ahead and get started. We really encourage participation. Everybody gets so much out of the Q&A, the presenters, and people who are attending. At the bottom of your Zoom screen, you'll see a little Q&A box. Go ahead and type your question into the Q&A box, and we'll get to as many of them as we can. Let me just introduce a couple of people. We have Quynh McGuire, VP of Investment Relations for Koppers, and Brad Pearce, Chief Accounting Officer for Koppers. Brad will be doing the presenting. Brad, please go ahead. Actually, before Brad starts, I will just make one comment, which is to say that since we're very close to our Q2 close, we will not be reiterating guidance, but we can certainly talk qualitatively about the end market trends that we're seeing. With that, I'll hand it off to Brad. Just tell me what slide. Okay. Thank you, Quynh. Yeah. If you want to move, Quynh, please, to the next slide. There we go. Okay. Yes. Thank you. Yeah, just to go through the presentation, just a few things to think about with Koppers and, again, why we view this as some of the strengths that we bring as a company. First is, if you look at our strategy, we have embarked on a strategy going back five years to really find ways to improve profitability of the company and really kind of looking at a lot of that through internal projects that we could implement that would improve the profitability of the company. We had a number of years of sort of heavier capital spending. We are now through all of those projects. They have been completed. We are now looking at a period of time where our capital spending is expected to be at lower levels. We think that will help to improve the cash flow of the company over the near term. If you look at the markets that we participate in, we are a market leader in those critical end markets with very high market shares, either number one or number two positions in the markets that we participate in. Being a market leader, again, helps us understand our markets and hopefully implement the key drivers to help us improve profitability. We have an experienced management team who have been with the company for many years, who understand the markets that they're in and have built strong relationships with our customer base. If you look at our company from a sustainability perspective, many of our products are using sustainable resources. We're also involved in end-of-life strategies for our products as they're taken out of service. Finally, just to wrap it up on the investment thesis, we've been a strong cash flow generator in the past. We believe that will continue and will, as we go through the next few years, give us even more sort of financial flexibility. Could you go to the next slide, Quynh? I'm trying to figure it out. Okay. Go ahead, and I'll get this moving. Got it. Yeah. The next slide deals with us being a leader in providing critical infrastructure products to our customers. On our Railroad and Utility Products and Services business, we are a leading supplier of cross ties to the Class I railroads in North America. We supply all six of the Class Is. On our utility and industrial products business, we are a leading supplier of utility poles both in the US and Australia. Just looking in the US alone, we supply eight of the 10 largest utilities. Again, our customer base there extends from investor-owned utilities, which are the large utilities, to the co-ops, which basically join together a lot of the rural electrical companies to give them purchasing power. On the Performance Chemicals side, we provide to the top 10 largest lumber treating companies in the U.S. This business, from a perspective of being a leader, is really involved in developing and improving wood treatment chemicals, which is going to go to various providers of treated wood chemicals, both on the residential side for lumber as well as extending out to industrial applications such as utility poles, marine pilings, anywhere that wood needs to be preserved and protected. Finally, from a Carbon Materials and Chemicals perspective, this business is really located in the U.S., Europe, and Australia. It has deep links with the aluminum industry in providing them products. As we will see a little bit later on, it has a lot of vertical integration with our railroad business. Next. Are you able to see, Brad? I can see the screen, yes. Okay. Let me just—is it moving? Yep. Awesome. Thank you. Okay. Thank you. Yeah, on slide six, it gives a little bit of a picture of our portfolio. If you look at sales by end market, you can see—maybe back up one slide or two slides. There we go. Thank you. Sorry about that. Okay. No problem. So yeah, from a sales by end market, you can see that we have a good dispersion of sales across various different industries. They have no particular reliance on one industry, with, again, a main focus on wood preservation and railroad cross ties. From a geographical perspective, we are mainly focused in North America, where that's around where 70% of our sales are. But then we have good distribution of sales in international markets between Australasia, Europe, and other countries. Other countries would be mainly places like South America, where our performance chemicals business has a presence. From a segment perspective, evenly distributed across our different businesses. And then finally, from a profitability perspective, you can see the largest part of the pie there is with our performance chemicals business, which is our highest EBITDA margin business relative to sales. Sort of underlying all of this is, I would say, two or three key things to keep in mind. One is on the utility pole business. There are 140 million utility poles installed in the network in North America. Every year, 2 million-3 million of those poles just need to be replaced due to age or storm damage. From a cross tie perspective, a very similar story in that 18 million-19 million cross ties need to be replaced every year. These cross ties are mainly being replaced on freight lines that extend across North America. From a performance chemicals side, there has been strong demand for the last couple of years on repair and remodeling activity. That business is supplying the chemical needed to treat lumber for outdoor applications. Excuse me. The next slide, please, Quynh. Slide seven. Monica has taken over. Okay. Turn seven. Okay. Thank you. This provides a high-level view across the different business segments. Our RUPS business, which again is the cross tie and utility pole business, is just a little bit less than half of our sales as a company. You can see the main focus there is the cross ties and utility poles. Our railroad business does have around $100 million of revenue being generated from other services that we do provide to the railroad, such as railroad bridge construction, a cross tie recovery business, and joint bars, which go into the track on a railroad. Performance Chemicals business, I had mentioned previously, from an EBITDA margin perspective, is our best-performing business. Had EBITDA margin last year of greater than 20%. You will see it if you get down into the results from this year. You will see that that has come down a little bit. I would kind of view last year as a bit higher margin than normal, just again, due to the strong demand for our chemicals last year. If you think about this business, it's both the repair and remodeling business, but also other applications such as utility poles, right? Finally, our Carbon Materials and Chemicals business, that's about a half a billion dollar business. If you looked at Koppers 10 years ago, that would have been a much larger element of our business. Due to changing market conditions, we took it upon ourselves to downsize that business from 11 plants 10 years ago down to three core plants that we operate now. When we talk about vertical integration, that is a very important element of our Carbon Materials and Chemicals business in that all of the creosote that we produce from our U.S. and European operations, all that creosote gets fed into our railroad cross tie business, as that is the principal wood treatment chemical for railroad cross ties. On the Performance Chemicals side, again, to a lesser extent, but still very important, there is vertical integration in that it does supply all of the chemical that our utility pole business requires. Okay. Monica, if you could flip forward to slide 14, please. All righty. Thank you. So just a little bit of a review of how we did in the first quarter of the year. You can see that from a top-line perspective, we were down around $40 million. That is mostly coming from some reduced revenue in our Performance Chemicals business due to changes in market share year over year. But in spite of that, we were able to actually increase our adjusted EBITDA by around $4 million. And really, when you kind of look behind that, a lot of that is being driven by just improved margin in our Railroad and Utility Products and Services business, as well as our Carbon Materials and Chemicals business, which have gone to make up for any of that profitability that declined in our Performance Chemicals business. From an adjusted EBITDA margin perspective, this is something we watch very, very carefully. Our goal is to get that sustainable up into the mid-teens. We did make progress with that in the first quarter, getting margins up to 12%. From an operating cash flow perspective, we were negative in the first quarter. A lot of that driven by the fact that we used $14 million to fund the termination of our largest US pension plan. We moved that plan off to an insurance company here in the first quarter. We have worked to de-risk our balance sheet from that perspective. Finally, from a capital expenditure perspective, capital spending is down this year. We're projecting it to be around $65 million this year compared to the $100 million-plus that we've had for the last few years as those major projects have been completed. Monica, if you could then please flip us forward to slide 22. Okay. Again, just a view about the capital deployment of the company. Our debt currently is around $950 million. That borrowing extends out to 2027 on our revolver and 2030 with our term loan B. Our long-term target for leverage is 2x-3x. We are up at the end of the first quarter to about 3.5x, largely being driven by the acquisition of Brown Wood that we made early in the second quarter of 2024. With that, we are looking for cash flow generation from operations again this year in excess of $100 million. With that lower level of capital expenditures being planned for this year, plan to, again, redirect that excess cash flow into debt reduction, as well as continuing to look for opportunistic share repurchase activity. In the first quarter, we did repurchase under our repurchase program $15 million of stock. We will look for opportunistic buying opportunities at our current stock price. Finally, we did reinstitute a dividend back a few years ago. We have steadily increased that year over year and are currently paying a dividend out at around $0.08 per quarter currently. With that, I will stop there with my prepared remarks. I think we have around 10 minutes left, and we will certainly open up to any questions. Thank you, Brad. Very informative. We do have some questions. Could you talk about the main growth drivers for the performance chemical business and then kind of review the same thing on CMC? Sure. The main growth driver on the Performance Chemicals business is we often look at repair and remodeling spending, which really drives the demand for treated lumber, which then will drive demand for our chemical. One of the indexes that we often watch is the LIRA Index, which tracks repair and remodeling spending. That has been very strong over the past couple of years. Fortunately, treated lumber has really not suffered the effects of inflation over the last couple of years and still is one of the things that remains pretty affordable at the big box retailers. We have seen that strength in that market be sustained over the last couple of years. On the CMNC side of the business, a good portion of that business is connected with the aluminum industry. That is just sort of overall economic strength. If we can have higher demand for aluminum, particularly coming out of North America and Europe, that will help positively drive the results of that business. Great. Speaking of CMC, I saw that the EBITDA margins for that particular business were up pretty significantly year over year. Is that sustainable, do you think? Is that the new normal, or would there be some sort of pullback that you might expect? Yeah. If you look at where that business was last year, the EBITDA margin of that business was just over 7%, which from our perspective is a very low level. Last year, we were hit with a number of factors that impacted profitability. One was we had an extended plant shutdown in North America in the early part of the year, which hurt profitability. That was really a weather-related effect. That business is the closest we have to sort of a true sort of commodity business where our sales price can fluctuate based upon supply and demand metrics. It was one of those years where sales prices were somewhat depressed, and we were still incurring sort of higher raw material costs. As we look into this year, we sort of see a normal return for that business in the low teens. We have returned there. The market supply dynamics have sort of corrected themselves. We do believe that is sustainable over the near term. In one of the presentation decks that you guys have online, you guys mentioned that rail is having a very, very good year. What's been driving that? Yeah. With the railroads, they are constantly they're very cost-conscious, obviously. They do come up with their repair and maintenance programs for their systems every year. Sometimes they do sort of slow down repair and maintenance activities to kind of maybe redirect that capital to other places. Ultimately, they do have a need to keep their tracks maintained and safe to operate. There can be maybe a little bit of year-to-year cyclicality in how much they're devoting to track repair and maintenance. This year, we kind of feel like we're a bit on an upswing there just on their annual programs. You'd say it's more volume-driven than pricing? Yeah. I would say this year is probably being driven a lot by volume. Again, it's not just the Class I's, but it's also the short-line railroads as well. As they have capital available to them, a lot of times they will then invest that into maintaining their tracks. I think we are being helped on the volume side this year. Often when Leroy is presenting, he'll talk about kind of tension with the railroads around pricing, also the big utility providers. What kind of contributes to the pricing dynamic there? I guess I'm asking whether it's possible for you guys to get a slightly larger share of it. Yeah. I'll first talk about the railroad contracts. Those contracts tend to be long-term contracts and can give us limited capability to increase prices year over year. Obviously, we do take that opportunity whenever we can. The last couple of years, particularly on some of our raw material pricing, that cost has gone up. We've approached some of the railroads about some out-of-contract price increases, and some have cooperated, and some are not as quick to cooperate. Wherever we have that opportunity, again, we will enter that dialogue with them and try to get some price increases to recover our costs. We are somewhat limited by how much we can do that under our contracts. From a utility pole perspective, we do have probably more flexibility there. Those contracts tend to be very much sort of much more short-term, many of them almost going year to year. As the dynamics in the cost structure changes, we have much more opportunity to try to seek price increases as, again, the market will allow in that utility business. Great. You would know, of course, that Koppers' stock has recovered a lot from the January lows, but it still feels like the market's not quite giving you credit for what you do. What is the market missing? What should they know that they're not seeing? Yeah. I think part of the market is, again, we're not a pure player, right? We're in a number of different markets, which I say are, again, those businesses are all adjacent to each other. Each one sort of goes through different cycles. I think where that is at least a benefit to Koppers, which I think maybe does get missed, is while maybe one business is having a very good year and another one is down, they tend to offset themselves year over year, such that maybe they will switch position in the following year. It does sort of provide a steady earnings stream year over year. I think it's important to consider sort of that consistency in earnings that we do have, as well as, again, if you look back over time, these businesses' ability to generate cash, which, again, I think is helpful as it goes towards debt service, stock buybacks, and a dividend, and then provides us with the capacity to then borrow to make key acquisitions, again, where we think we can strengthen and expand our growth opportunities. You have a share repurchase program out there where you purchased $19 million in shares in Q1. If I understood you right, you're planning just to be active opportunistically going forward? Yes. Yeah. Okay. And so that's in the neighborhood of 15-20% of outstanding shares, right? Yeah. Yeah. So I mean, yeah, we have around 20 million shares outstanding. And right now, again, our credit agreement today sort of does limit us on an annual basis as to how much stock that we can buy back. But it's not restrictive that I think it impairs us from being able to buy back opportunistically over the year. If you look at last year's buyback activity, I think it was in excess of $40 million, which is all done, again, within the constraints that we have under our credit agreement. We have time for one more question. Let's kind of drill down a little bit on the debt side of things. You have all this free cash flow that you're generating this year because you don't have a big acquisition. You've cut capital spending. Is it fair to say that paying down debt is kind of the highest priority? Would you characterize it that way? I would say, yeah, near term, there's a focus on getting the debt paid down so that we can really work toward getting below three times, particularly, again, in the cycle that, again, we find ourselves in this year where a lot of those heavy internal capital expenditures programs that we had, those projects are now complete. We are watching very carefully the cash, trying to control working capital to provide that excess cash flow that can go toward stock—I'm sorry—can go toward debt paydown. Great, Brad. Very, very informative. We have come to the end of our time. Folks, thank you very much for joining. If we were unable to get to your question, and I'm sorry we didn't get to all of them, please follow up with your Sidoti representative, and we'll run down answers for you. Thanks again, everyone, for joining. We'll look forward to seeing you again at the next conference. Thanks again. Thanks, Michael. Thanks to you and your team. Take care. Thank you.