Koppers Holdings Inc.

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the COPIRS third quarter 2022 earnings conference call and webcast. At this time, all participants will be in listen-only mode. If you need assistance, please alert a conference specialist by pressing star followed by zero. Following the presentation, instructions will be given for the question and answer session. Please note that this event is being recorded. I will now turn the call over to Quinn McGuire. Please go ahead.

Thanks, and good morning. I'm Quinn McGuire, Vice President of Investor Relations. Welcome to our third quarter 2022 earnings conference call. We issued our press release earlier today. You may access it via our website at coppers.com. As indicated in our announcement, we've also posted materials to the investor relations page of our website that will be referenced in today's call. Consistent with our practice in prior quarterly conference calls, this is being broadcast live on our website, and a recording of this call will be available on our website for replay through February 4th, 2023. At this time, I would like to direct your attention to our forward-looking disclosure statement seen on slide two. Certain comments made on this conference call may be characterized as forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve a number of assumptions, risks, and uncertainties, including risks described in the cautionary statement included in our press release and in the company's filings with the Securities and Exchange Commission. In light of the significant uncertainties inherent in the forward-looking statements included in the company's comments, you should not regard the inclusion of such information as a representation that its objective, plans, and projected results will be achieved. The company's actual results, performance, or achievements may differ materially from those expressed in or implied by such forward-looking statements. The company assumes no obligation to update any forward-looking statements made during this call. References may also be made to certain non-GAAP financial measures. The company has provided with its press release, which is available on our website, reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures. Today you will hear from the following, Leroy Ball, President and CEO of Coppers, and Jimmy Sue Smith, Chief Financial Officer. I'll now turn it over to Leroy.

Thank you, Quinn. Good morning, everyone. Welcome to a review of our third quarter results. I'm excited to report that we finished the third quarter with record sales and record CMC adjusted EBITDA performance, which keeps us on track for delivering another record year. We have much to share with you about the details of our financial performance, and we'll do so later on in the call. As always, we'll begin with zero harm. As you've seen on slide four, next week is the busy one for our zero harm team as they're hosting two key events in Pittsburgh. Our Zero Harm Truck Driving Championship on November 7th and 8th recognizes our 10 safest and most skilled drivers who represent coppers while out on the road delivering essential products and serving as a critical connection to our customers. These finalists reported zero total accidents from September 2021 through August 2022. Our team of professional truck drivers plays an important role in maintaining a high standard of overall safety performance in an inherently high-risk environment, logging nearly 12 million miles annually to deliver critical goods across the nation. Also next week is our annual Zero Harm Coordinator Conference, where we'll have 38 coordinators come together in Pittsburgh for a three-day conference focused on leadership development and relevant safety, health, and environmental training. It's an opportunity to share ideas and experiences and strengthen the network at the front end of protecting what matters and preserving the future. Slide 5 shows that in the third quarter, 22 of our 43 operating facilities worked accident-free. Year-to-date, as of September 30th, I'm proud to say that the total recordable rate of safety incidents was 23% lower than at the same time last year, and we're approaching record lows in incidents. Also, we continue to pursue Zero Harm 2.0 as a comprehensive initiative to accelerate our progress to zero injuries and zero environmental harm throughout the organization. We are continuing to use proven strategies and tactics while also gaining more input from frontline employees as the basis for developing highly practical training tools. We're concentrating on peer-to-peer interactions as a key to greater and faster awareness, acceptance, and incorporation of Zero Harm procedures. Now, seen on slide six, the Zero Harm work streams include frontline training, supporting the SH&E coordinator role, maximizing the user experience in the Zero Harm information system, strengthening our governance oversight, and expanding communications and messaging. The work streams are being managed in a formal project environment to recatalyze Zero Harm and take it to the next level. The ongoing support and participation of our worldwide team for advancing this Zero Harm culture remains a great source of pride and admiration for our organization. This journey towards zero will never end, and we're up to the challenge to maintain that focus every day. Now let's shift gears and talk about our third quarter highlights on slide seven. To say there's a lot going on will be a dramatic understatement as evidenced by the flurry of news releases we've issued over the past few weeks. Now I'll get to more details on those items in a bit, but first let me summarize some of our recent financial achievements. Third quarter saw our third straight quarterly historical high in consolidated sales and our second straight quarter of cracking the $500 million mark. This puts us on track to reach the $2 billion level in sales for the first time in company history. Those sales levels have been driven by historic price appreciation for our products and supported by solid demand dynamics in each of our three business segments. Through nine months, prices added an astounding $271 million to our top line, while adjusted EBITDA through nine months of $176 million is basically sitting right on the comparable prior year EBITDA number. The silver lining is there is more price to come in 2023, while the cost increases have been decelerating for the most part. Our CMC business generated record quarterly results driven by stronger pricing supported by a globally balanced supply and demand environment and continued operations improvements. Demand for our PC products remained high while we continued working down higher cost inventory that have had a negative impact on margins. a situation that will continue to temper in the fourth quarter and should reverse in January 2023 as our January 1st price increases take effect. ROPS improved sequentially and year-over-year as hardwood supply continued to increase and demand for utility infrastructure remained robust. Additionally, we were successful in overcoming the dual headwinds of a stronger U.S. dollar on our foreign earnings and an effective tax rate increase. Just for perspective, if the US dollar had been at 2021 levels, we would have had adjusted EBITDA comfortably in the 70-plus million range this quarter. Our highest year-over-year tax rate is expected to take a $0.60 per share bite out of our adjusted EPS and keep us from otherwise easily topping last year's all-time high. The impressive results that we delivered speak to the ongoing strength of our diversified business model and the success of the various initiatives of our strategy to expand and optimize our business which we debuted in September 2021. We're on pace to finish 2022 with another year of record sales and profitability and make meaningful progress in 2023 on our path to reach our $300 million adjusted EBITDA goal in 2025. My deepest appreciation goes out to our incredible team worldwide who continues to find ways to convert challenging conditions into opportunities for growth. Now I'd like to turn it over to our CFO, Jimmy Sue Smith, for a more detailed review of third quarter financial results.