Net loss for the quarter was
While Koppers North American railroad results improved due to increased hardwood availability and the Performance Chemicals (PC) business performed consistent with expectations, profitability for CMC was adversely affected by the impact of lower oil prices on the selling prices of certain CMC products while an extended unplanned outage at the
Commenting on the quarter,
Mr. Ball continued, "I am particularly pleased that we were able to pay down approximately
2015 Guidance Affirmed
Commenting on 2015 Mr. Ball said, "I remain comfortable with our previously issued guidance that provides for sales of approximately
Summary of First-Quarter Financial Performance:
- Sales for RUPS of
$158.1 million increased by 23 percent or$29.3 million compared to sales of$128.8 million in the prior year quarter. The net increase in sales in RUPS was due mainly to higher sales volumes for railroad crossties. The incremental sales from the Osmose businesses that are included in RUPS were almost entirely offset by lower sales of utility poles due to the sale of the North American utility business, lower sales volumes of poles inAustralia , and the negative translation effect of the stronger US dollar on Australian pole sales.
- PC reported revenues of
$81.5 million for the first quarter, which like the fourth quarter, is one of its seasonally weaker quarters for sales and profitability. Sales in each region that the PC segment operates in were at or better than expectations in the first quarter when measured in local currency.
- Sales for CMC totaling
$158.2 million decreased by 22 percent or$44.4 million compared to sales of$202.6 million in the prior year quarter. The decline was due to lower sales prices for carbon black feedstock, phthalic anhydride, and naphthalene, which were driven by lower oil prices, and foreign currency reduced CMC sales by approximately$13.2 million . These decreases in sales were partially offset by$14.6 million of incremental revenues from the KJCC joint venture inChina .
- Adjusted EBITDA was
$26.9 million compared to$25.4 million in the first quarter of 2014 due mainly to incremental earnings from the Osmose acquisition, higher earnings from RUPS, and lower global coal tar raw material costs, which more than offset lower earnings from CMC driven by lower sales prices, the impact of theStickney plant outage, and foreign currency losses.
- Items excluded from adjusted EBITDA for the quarter included
$5.4 million of pre-tax charges related to impairment, restructuring and plant closure costs, and$0.6 million of LIFO expense, partially offset by a gain on sale of the utility business of$2.3 million . Adjusted net income and adjusted EPS exclude a$4.0 million impact related to the items above.
For the company's 2015 guidance, Adjusted EBITDA and Adjusted EPS exclude restructuring, impairment, and plant closure charges and LIFO charges, the exact amounts of which are not determinable, but may be significant. For that reason, the company is unable to provide GAAP earnings estimates at this time. In addition, 2015 GAAP results are subject to completion of the company's year-end accounting processes, which include the finalization of several potentially significant items that could affect these results. These items include, among others, required adjustments to preliminary purchase accounting, and the company's annual provision for income taxes. Final results could also be affected by various other factors that we are unaware of at this time.
Investor Conference Call and Web Simulcast
The live broadcast of
Please note that there will be presentation materials posted to the company's website prior to the call.
If you are unable to participate during the live webcast, the call will be archived on www.koppers.com and www.streetevents.com shortly after the live call and continuing through
The following reconciliations are included in this press release: Unaudited Reconciliation of Net Income Attributable to
About
Safe Harbor Statement
Certain statements in this press release are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and may include, but are not limited to, statements about sales levels, acquisitions, restructuring, declines in the value of
Koppers Holdings Inc. | ||||||||||
Unaudited Consolidated Statement of Operations | ||||||||||
(Dollars in millions, except per share amounts) | ||||||||||
Three Months Ended March 31, | ||||||||||
2015 | 2014 | |||||||||
Net sales | $ | 397.8 | $ | 331.4 | ||||||
Cost of sales (excluding items below) | 343.5 | 285.1 | ||||||||
Depreciation and amortization | 15.0 | 8.9 | ||||||||
Gain on sale of business | (3.2 | ) | - | |||||||
Impairment and restructuring charges | 2.7 | 15.5 | ||||||||
Selling, general and administrative expenses | 31.8 | 21.4 | ||||||||
Operating profit | 8.0 | 0.5 | ||||||||
Other income | 0.2 | 0.2 | ||||||||
Interest expense | 13.0 | 6.8 | ||||||||
Loss before income taxes | (4.8 | ) | (6.1 | ) | ||||||
Income taxes | (0.6 | ) | (6.0 | ) | ||||||
Net loss | (4.2 | ) | (0.1 | ) | ||||||
Net loss attributable to noncontrolling interests | (0.8 | ) | (2.3 | ) | ||||||
Net (loss) income attributable to Koppers | $ | (3.4 | ) | $ | 2.2 | |||||
(Loss) earnings per common share: | ||||||||||
(Loss) earnings per basic common share | $ | (0.16 | ) | $ | 0.11 | |||||
(Loss) earnings per diluted common share | $ | (0.16 | ) | $ | 0.11 | |||||
Weighted average shares outstanding (in thousands): | ||||||||||
Basic | 20,512 | 20,384 | ||||||||
Diluted | 20,512 | 20,588 | ||||||||
Dividends declared per common share | $ | - | $ | 0.25 | ||||||
Koppers Holdings Inc. | |||||||||
Unaudited Consolidated Balance Sheet | |||||||||
(Dollars in millions, except per share amounts) | |||||||||
March 31, 2015 | December 31, 2014 | ||||||||
Assets | |||||||||
Cash and cash equivalents | $ | 25.8 | $ | 51.1 | |||||
Accounts receivable, net of allowance of $5.3 and $5.6 | 190.8 | 198.7 | |||||||
Income tax receivable | 4.5 | - | |||||||
Inventories, net | 222.5 | 241.2 | |||||||
Deferred tax assets | 10.7 | 10.5 | |||||||
Loan to related party | 9.5 | 9.5 | |||||||
Other current assets | 31.5 | 30.3 | |||||||
Total current assets | 495.3 | 541.3 | |||||||
Equity in non-consolidated investments | 4.5 | 5.0 | |||||||
Property, plant and equipment, net | 294.0 | 299.7 | |||||||
Goodwill | 248.7 | 247.2 | |||||||
Identifiable intangible assets, net | 169.1 | 167.7 | |||||||
Deferred tax assets | 7.0 | 7.8 | |||||||
Other assets | 25.2 | 25.2 | |||||||
Total assets | $ | 1,243.8 | $ | 1,293.9 | |||||
Liabilities | |||||||||
Accounts payable | $ | 142.9 | $ | 120.6 | |||||
Accrued liabilities | 107.4 | 122.5 | |||||||
Dividends payable | 1.7 | 5.1 | |||||||
Short-term debt and current portion of long-term debt | 44.7 | 43.9 | |||||||
Total current liabilities | 296.7 | 292.1 | |||||||
Long-term debt | 770.9 | 806.6 | |||||||
Accrued postretirement benefits | 53.8 | 54.7 | |||||||
Deferred tax liabilities | 9.0 | 10.2 | |||||||
Other long-term liabilities | 47.0 | 46.4 | |||||||
Total liabilities | 1,177.4 | 1,210.0 | |||||||
Commitments and contingent liabilities | |||||||||
Equity | |||||||||
Senior Convertible Preferred Stock, $0.01 par value per share; 10,000,000 shares authorized; no shares issued | - | - | |||||||
Common Stock, $0.01 par value per share; 40,000,000 shares authorized; 21,991,940 and 21,938,260 shares issued | 0.2 | 0.2 | |||||||
Additional paid-in capital | 165.1 | 164.5 | |||||||
Retained earnings | 14.7 | 18.0 | |||||||
Accumulated other comprehensive loss | (70.5 | ) | (60.3 | ) | |||||
Treasury stock, at cost; 1,457,523 and 1,443,248 shares | (52.7 | ) | (52.4 | ) | |||||
Total Koppers shareholders' equity | 56.8 | 70.0 | |||||||
Noncontrolling interests | 9.6 | 13.9 | |||||||
Total equity | $ | 66.4 | $ | 83.9 | |||||
Total liabilities and equity | $ | 1,243.8 | $ | 1,293.9 | |||||
Koppers Holdings Inc. | |||||||||||
Unaudited Consolidated Statement of Cash Flows | |||||||||||
(Dollars in millions) | |||||||||||
Three Months Ended March 31, 2015 | Three Months Ended March 31, 2014 | ||||||||||
Cash provided by (used in) operating activities: | |||||||||||
Net (loss) income | $ | (4.2 | ) | $ | (0.1 | ) | |||||
Adjustments to reconcile net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 15.0 | 8.9 | |||||||||
Impairment and restructuring charges | 2.7 | 4.7 | |||||||||
Gain on sale of assets and businesses | (3.2 | ) | - | ||||||||
Deferred income taxes | (1.6 | ) | (7.2 | ) | |||||||
Equity loss, net of dividends received | 0.5 | - | |||||||||
Change in other liabilities | 0.7 | (2.8 | ) | ||||||||
Non-cash interest expense | 0.9 | 0.4 | |||||||||
Stock-based compensation | 0.7 | 1.2 | |||||||||
Other | 1.8 | 0.2 | |||||||||
Changes in working capital: | |||||||||||
Accounts receivable | 3.1 | 2.1 | |||||||||
Inventories | 4.8 | (6.6 | ) | ||||||||
Accounts payable | 24.2 | (16.8 | ) | ||||||||
Accrued liabilities and other working capital | (25.7 | ) | 2.3 | ||||||||
Net cash provided by (used in) operating activities | 19.7 | (13.7 | ) | ||||||||
Cash used in investing activities: | |||||||||||
Capital expenditures | (7.0 | ) | (14.8 | ) | |||||||
Acquisitions, net of cash acquired | (15.3 | ) | (29.6 | ) | |||||||
Net cash proceeds from divestitures and asset sales | 12.3 | - | |||||||||
Net cash used in investing activities | (10.0 | ) | (44.4 | ) | |||||||
Cash (used in) provided by financing activities: | |||||||||||
Borrowings of revolving credit | 148.1 | 67.5 | |||||||||
Repayments of revolving credit | (176.5 | ) | (52.5 | ) | |||||||
Borrowings of long-term debt | - | 22.2 | |||||||||
Repayments of long-term debt | (6.6 | ) | - | ||||||||
Repurchases of Common Stock | (0.3 | ) | (2.0 | ) | |||||||
Payment of deferred financing costs | (0.1 | ) | - | ||||||||
Dividends paid | (6.8 | ) | (5.0 | ) | |||||||
Net cash (used in) provided by financing activities | (42.2 | ) | 30.2 | ||||||||
Effect of exchange rate changes on cash | 7.2 | 0.4 | |||||||||
Net decrease in cash and cash equivalents | (25.3 | ) | (27.5 | ) | |||||||
Cash and cash equivalents at beginning of period | 51.1 | 82.2 | |||||||||
Cash and cash equivalents at end of period | $ | 25.8 | $ | 54.7 | |||||||
Unaudited Segment Information
The following tables set forth certain sales and operating data, net of all intersegment transactions, for the company's businesses for the periods indicated.
Three Months Ended March 31, | ||||||||||
2015 | 2014 | |||||||||
Net sales: | ||||||||||
Carbon Materials and Chemicals | $ | 158.2 | $ | 202.6 | ||||||
Railroad and Utility Products and Services | 158.1 | 128.8 | ||||||||
Performance Chemicals | 81.5 | - | ||||||||
Total | 397.8 | 331.4 | ||||||||
Operating (loss) profit: | ||||||||||
Carbon Materials and Chemicals | (10.9 | ) | (8.8 | ) | ||||||
Railroad and Utility Products and Services | 15.4 | 11.1 | ||||||||
Performance Chemicals | 6.4 | - | ||||||||
Corporate Unallocated | (2.9 | ) | (1.8 | ) | ||||||
Total | 8.0 | 0.5 | ||||||||
Depreciation and amortization: | ||||||||||
Carbon Materials and Chemicals | 6.2 | 6.1 | ||||||||
Railroad and Utility Products and Services | 4.1 | 2.8 | ||||||||
Performance Chemicals | 4.7 | - | ||||||||
Total | 15.0 | 8.9 | ||||||||
Other (loss) income: | ||||||||||
Carbon Materials and Chemicals | (0.6 | ) | 0.5 | |||||||
Railroad and Utility Products and Services | 0.1 | (0.9 | ) | |||||||
Performance Chemicals | 0.5 | - | ||||||||
Corporate Unallocated | 0.2 | 0.6 | ||||||||
Total | 0.2 | 0.2 | ||||||||
Adjusted EBITDA (1) : | ||||||||||
Carbon Materials and Chemicals | (2.6 | ) | 13.6 | |||||||
Railroad and Utility Products and Services | 20.6 | 13.0 | ||||||||
Performance Chemicals | 11.6 | - | ||||||||
Corporate Unallocated | (2.7 | ) | (1.2 | ) | ||||||
Total | $ | 26.9 | $ | 25.4 | ||||||
Adjusted EBITDA margin: | ||||||||||
Carbon Materials and Chemicals | (1.6 | )% | 6.7 | % | ||||||
Railroad and Utility Products and Services | 13.0 | % | 10.1 | % | ||||||
Performance Chemicals | 14.2 | % | - | % | ||||||
Total | 6.8 | % | 7.7 | % | ||||||
(1) The tables below describe the adjustments to EBITDA for the quarters ended
Adjustments to EBITDA | ||||||||||||||||||||||||||
Q1 2015 | Q1 2014 | |||||||||||||||||||||||||
CMC adjustments | ||||||||||||||||||||||||||
COGS | R&I | SGA | Total | COGS | R&I | SGA | Total | |||||||||||||||||||
North American restructuring | $ | 0.3 | $ | - | $ | 1.7 | $ | 2.0 | $ | - | $ | - | $ | - | $ | - | ||||||||||
Uithoorn closure | $ | 0.5 | $ | - | $ | 0.1 | $ | 0.6 | $ | - | $ | 10.8 | $ | 0.3 | $ | 11.1 | ||||||||||
KCCC impairment | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 4.7 | $ | - | $ | 4.7 | ||||||||||
LIFO | $ | 0.1 | $ | - | $ | - | $ | 0.1 | $ | - | $ | - | $ | - | $ | - | ||||||||||
$ | 0.9 | $ | - | $ | 1.8 | $ | 2.7 | $ | - | $ | 15.5 | $ | 0.3 | $ | 15.8 | |||||||||||
RUPS adjustments | ||||||||||||||||||||||||||
Green Spring closure | $ | 0.1 | $ | 2.7 | $ | - | $ | 2.8 | $ | - | $ | - | $ | - | $ | - | ||||||||||
Net gain on sale of utility business | $ | (2.3 | ) | $ | - | $ | - | $ | (2.3 | ) | $ | - | $ | - | $ | - | $ | - | ||||||||
LIFO | $ | 0.5 | $ | - | $ | - | $ | 0.5 | $ | - | $ | - | $ | - | $ | - | ||||||||||
$ | (1.7 | ) | $ | 2.7 | $ | - | $ | 1.0 | $ | - | $ | - | $ | - | $ | - | ||||||||||
Total adjustments | $ | (0.8 | ) | $ | 2.7 | $ | 1.8 | $ | 3.7 | $ | - | $ | 15.5 | $ | 0.3 | $ | 15.8 | |||||||||
Although
UNAUDITED RECONCILIATION OF NET INCOME ATTRIBUTABLE TO KOPPERS AND ADJUSTED NET INCOME | |||||||
(In millions) | |||||||
Three Months Ended March 31, | |||||||
2015 | 2014 | ||||||
Net (loss) income attributable to Koppers | $ | (3.4 | ) | $ | 2.2 | ||
Items impacting pre-tax income (1) | |||||||
Impairment, restructuring and plant closure costs | 6.1 | 17.2 | |||||
Net gain on sale of North American utility pole business | (2.3 | ) | - | ||||
LIFO | 0.6 | - | |||||
Items impacting net income, net of tax and non-controlling interests | 4.0 | 4.4 | |||||
Adjusted net income | $ | 0.6 | $ | 6.6 | |||
Adjustments to pre-tax income | |||||||||||||||||||||||||||||||||
Q1 2015 | Q1 2014 | ||||||||||||||||||||||||||||||||
CMC adjustments | |||||||||||||||||||||||||||||||||
COGS | R&I | D&A | SGA | Total | COGS | D&A | R&I | SGA | Total | ||||||||||||||||||||||||
North American | $ | 0.3 | $ | - | $ | - | $ | 1.7 | $ | 2.0 | $ | - | $ | - | $ | - | $ | - | |||||||||||||||
restructuring | |||||||||||||||||||||||||||||||||
Uithoorn closure | $ | 0.5 | $ | - | $ | (0.1 | ) | $ | 0.1 | $ | 0.5 | $ | - | $ | 0.9 | $ | 10.8 | $ | 0.3 | $ | 12.0 | ||||||||||||
KCCC impairment | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 0.5 | $ | 4.7 | $ | - | $ | 5.2 | |||||||||||||
LIFO | $ | 0.1 | $ | - | $ | - | $ | - | $ | 0.1 | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||||
$ | 0.9 | $ | - | $ | (0.1 | ) | $ | 1.8 | $ | 2.6 | $ | - | $ | 1.4 | $ | 15.5 | $ | 0.3 | $ | 17.2 | |||||||||||||
RUPS adjustments | |||||||||||||||||||||||||||||||||
Green Spring closure | $ | 0.1 | $ | 2.7 | $ | 0.8 | $ | - | $ | 3.6 | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||||
Net gain on sale of utility business | $ | (2.3 | ) | $ | - | $ | - | $ | - | $ | (2.3 | ) | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||
LIFO | $ | 0.5 | $ | - | $ | - | $ | - | $ | 0.5 | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||||
$ | (1.7 | ) | $ | 2.7 | $ | 0.8 | $ | - | $ | 1.8 | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||||
Total adjustments | $ | (0.8 | ) | $ | 2.7 | $ | 0.7 | $ | 1.8 | $ | 4.4 | $ | - | $ | 1.4 | $ | 15.5 | $ | 0.3 | $ | 17.2 | ||||||||||||
UNAUDITED RECONCILIATION OF DILUTED EARNINGS PER SHARE AND | |||||||
ADJUSTED EARNINGS PER SHARE | |||||||
(In millions except share amounts) | |||||||
Three Months Ended March 31, | |||||||
2015 | 2014 | ||||||
Net (loss) income attributable to Koppers | $ | (3.4 | ) | $ | 2.2 | ||
Adjusted net income (from above) | $ | 0.6 | $ | 6.6 | |||
Denominator for diluted earnings per share (000s) | 20,512 | 20,588 | |||||
(Loss) earnings per share: | |||||||
Diluted (loss) earnings per share | $ | (0.16 | ) | $ | 0.11 | ||
Adjusted earnings per share | $ | 0.03 | $ | 0.32 | |||
UNAUDITED RECONCILIATION OF NET INCOME TO EBITDA AND ADJUSTED EBITDA | ||||||||||
(In millions) | ||||||||||
Three Months Ended March 31, | ||||||||||
2015 | 2014 | |||||||||
Net loss | $ | (4.2 | ) | $ | (0.1 | ) | ||||
Interest expense | 13.0 | 6.8 | ||||||||
Depreciation and amortization | 15.0 | 8.9 | ||||||||
Income tax provision | (0.6 | ) | (6.0 | ) | ||||||
EBITDA with noncontrolling interests | 23.2 | 9.6 | ||||||||
Items impacting net income (1) | ||||||||||
Impairment, restructuring and plant closure costs | 5.4 | 15.8 | ||||||||
Net gain on sale of North American utility pole business | (2.3 | ) | - | |||||||
LIFO | 0.6 | - | ||||||||
Adjusted EBITDA with noncontrolling interests | $ | 26.9 | $ | 25.4 | ||||||
(1) Refer to adjustments under Unaudited Segment Information.
For Information:
Michael J. Zugay
Chief Financial Officer
412 227 2231
Email contact
Source: