Koppers (KOP) Q4 2023 earnings summary

Executive summary

• FY2023 sales reached a record $2.15B, up 8.8% YoY; operating profit was a record $195.2M, 25% above the prior record.

• FY adjusted EBITDA was a record $256.4M, adjusted EPS was $4.36, and operating cash flow was a record $146.1M.

• Q4 sales reached a record $513.2M, up 6.3% YoY; adjusted EBITDA was a fourth-quarter record of $53.9M, while adjusted EPS declined to $0.67 from $1.09.

Financial highlights

• Q4 diluted EPS was $0.59 versus $0.65; adjusted net income was $14.5M and adjusted EPS was $0.67 versus $23.0M and $1.09.

• FY net income was $89.2M versus $63.4M; adjusted net income was $94.0M versus $88.3M.

• FY diluted EPS was $4.14 versus $2.98; adjusted EPS was a record $4.36 versus $4.14.

• FY operating cash flow was $146.1M versus $102.3M, a record and the fifth consecutive year above $100M.

Outlook and guidance

• 2024 guidance: sales of ~$2.25B, adjusted EBITDA of ~$275M and adjusted EPS of $4.60-$4.80, excluding special charges.

• Operating cash flow is forecast at ~$150M before pension termination impact; ~$25M funding is expected upon targeted U.S. qualified pension plan termination in Q4 2024.

• 2024 capex is forecast at ~$100M; includes $61.4M maintenance, $9.5M Zero Harm and $29.1M growth and productivity.

• The 2025 adjusted EBITDA target is $300M; 2024-2025 capex above the annual ~$75M maintenance and Zero Harm base is expected to support profitability in 2026 and beyond.

• Guidance assumes demand flat to slightly up; growth drivers include carry-over pricing, Leesville, a full year of North Little Rock efficiencies, and segment volume expectations.