Koppers Holdings(US:KOP)2025-05-09 16:21Financial Performance - Consolidated net sales for Q1 2025 were $456.5 million, a decrease of 8.3% compared to $497.6 million in Q1 2024[110]. - Performance Chemicals segment net sales decreased by 19.5% to $120.9 million, primarily due to a 21.5% drop in volumes of residential and industrial preservatives in the Americas[111]. - Carbon Materials and Chemicals segment net sales fell by 17.8% to $100.6 million, attributed to a $10.8 million decrease in phthalic anhydride volumes and an 8% decline in carbon pitch prices globally[112]. - Adjusted EBITDA for Railroad and Utility Products and Services increased by 44.1% to $25.5 million, while Performance Chemicals decreased by 32.6% to $20.1 million, and Carbon Materials and Chemicals increased by 147.5% to $9.9 million[118]. - Total adjusted EBITDA rose by 7.8% to $55.5 million compared to $51.5 million in the prior year[118]. Segment Performance - Railroad and Utility Products and Services segment saw a 4.4% increase in net sales to $235.0 million, driven by higher volumes in Class I crosstie business and a 9% increase in domestic utility pole sales[110]. - The Railway Tie Association estimates total crosstie purchases in 2025 to be approximately 19.9 million ties, slightly lower than the 2024 estimate of 20.0 million[108]. - Market demand for utility poles is expected to grow in 2025, particularly in the second half, driven by aging infrastructure and renewable energy expansion[108]. Operational Efficiency - The company plans to streamline operations to support a cost-conscious customer base and enhance profitability amid competitive and economic challenges[104]. - Cost of sales as a percentage of net sales decreased to 77% from 81% in the prior year, attributed to lower freight, operating, and raw material costs, despite lower sales volumes[113]. Cash Flow and Liquidity - Net cash used in operating activities was $22.7 million, up from $12.3 million in the prior year, primarily due to higher working capital usage and a pension settlement loss[122]. - Net cash used in investing activities decreased to $17.6 million from $25.8 million, mainly due to lower capital expenditures[123]. - Net cash provided by financing activities increased to $28.7 million from $23.0 million, driven by net borrowings of $49.1 million[125]. - As of March 31, 2025, liquidity from the Credit Facility and cash on hand was approximately $320 million[126]. Capital Expenditures and Leverage - Capital expenditures in 2025 are expected to total approximately $65 million, funded by cash from operations[127]. - The total net leverage ratio as of March 31, 2025, was 3.34, with a cash interest coverage ratio of 4.0[134]. Market Trends - The Leading Indicator of Remodeling Activity projects a 2.5% year-over-year increase in homeowner renovation spending, reaching $526 billion by Q1 2026[108]. - The company is actively working to mitigate the impacts of reduced coal tar supply by gaining market acceptance for petroleum-blended products[108].