Koppers (KOP) Q2 2024 earnings summary

Executive summary

• Q2 2024 sales were $563.2 million, down 2.4% year-over-year, with net income of $26.8 million, up from $24.4 million; adjusted EBITDA reached a record $77.5 million, up 10.2% year-over-year, and diluted EPS rose to $1.25 from $1.15.

• All three business segments showed sequential improvement, with RUPS posting record sales and PC margins rising, while CMC faced demand softness.

• Brown Wood Preserving Company acquisition closed April 1, 2024, expanding RUPS and contributing to capacity and flexibility.

• Focused on cost control, operational efficiency, and sustainability, achieving a 50% reduction in Scope 1 and 2 emissions seven years ahead of schedule.

• Operating cash flow and liquidity improved, with $27.2 million in Q2 and $325 million available at quarter-end.

Financial highlights

• Consolidated Q2 sales: $563.2 million, down from $577.2 million year-over-year; adjusted EBITDA: $77.5 million (13.8% margin), up from $70.3 million (12.2%).

• Diluted EPS: $1.25; adjusted EPS: $1.36, both up from prior year.

• Operating cash flow for Q2 was $27.2 million, up from $13.2 million year-over-year.

• Net debt at June 30, 2024: $943 million, with net leverage ratio at 3.7x.

• Liquidity at quarter-end was approximately $325 million.

Outlook and guidance

• 2024 sales forecasted at approximately $2.15 billion, flat year-over-year.

• Adjusted EBITDA guidance maintained at $265 million–$280 million.

• Adjusted EPS guidance reaffirmed at $4.10–$4.60.

• Capital expenditures for 2024 projected at $80–$85 million.

• Net leverage expected to exit 2024 in the low 3s, targeting 2–3x long-term.