On November 3, 2023, Koppers Holdings Inc (KOP, Financial), a global provider of treated wood products, wood treatment chemicals, and carbon compounds, released its Q3 2023 earnings report. The company reported a net income of $26.3 million, or $1.22 per diluted share, compared to $19.1 million, or $0.91 per diluted share, in the prior year quarter. Adjusted net income and adjusted earnings per share (EPS) were $28.6 million and $1.32 per share respectively, compared to $25.1 million and $1.19 per share in the prior year quarter.
Performance Highlights
The company's consolidated sales reached a Q3 record of $550.4 million, a 2.7% increase from $536.1 million in the prior year quarter. The RUPS business delivered record third-quarter sales and profitability due to pricing increases and higher volumes, despite increased raw material and operating costs. The PC segment also generated record sales and profitability as renegotiated customer contracts allowed for price increases to address higher costs. However, the CMC segment experienced a decline in sales and profitability due to lower prices and volumes related to weaker market demand.
Financial Performance
The RUPS segment reported record third-quarter sales of $234.0 million, an increase of 12.7% compared to the prior year quarter. The PC segment delivered record third-quarter sales of $179.4 million, a 17.2% increase compared to the prior year quarter. However, sales for the CMC segment decreased by 21.8% compared to the prior year quarter. Capital expenditures for the nine months ended September 30, 2023, were $91.3 million, compared with $80.0 million for the prior year period.
2023 Outlook
Despite global economic conditions and ongoing geopolitical and supply chain challenges, Koppers continues to expect 2023 sales of approximately $2.1 billion, compared with $1.98 billion in the prior year. Adjusted EBITDA is anticipated to be in the range of $253 million to $257 million in 2023, compared with $228.1 million in the prior year. The effective tax rate for adjusted net income attributable to Koppers in 2023 is projected to be approximately 28 percent, slightly below the adjusted tax rate in 2022. Accordingly, 2023 adjusted EPS is forecasted to be in the range of $4.35 to $4.55 per share, compared with $4.14 per share in the prior year.
CEO Commentary
President and CEO Leroy Ball commented on the results, saying,
I am happy to report that our third-quarter financial results demonstrate continued solid progress toward our short- and long-term strategic goals. Profitability was strong overall, driven by record quarterly adjusted EBITDA in our PC and RUPS businesses, while our CMC business held its own in a tougher market environment."
Explore the complete 8-K earnings release (here) from Koppers Holdings Inc for further details.
