Koppers Holdings Inc.

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to COPPR's first quarter 2023 earnings conference call and webcast. At this time, all participants are in listen-only mode. If you need assistance, please signal a conference specialist by pressing the star key 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 first quarter 2023 earnings conference call. We issued our press release earlier today. You may access it via our website at www.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 and 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 August 5th, 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 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 objectives, 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 today to certain non-GAAP financial measures. The company is 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. Joining me for our call today are Leroy Ball, President and CEO of Coppers, and Jimmy Sue Smith, Chief Financial Officer. I will now turn this discussion over to Leroy.

Thank you, Quinn. Good morning, everyone. Thanks for taking time to join us today. As you may have seen in our announcement earlier and as shown on slide three, Coppers will be hosting an investor day scheduled for Thursday, September 14th, 2023, which will take place at the Intercontinental Chicago. On the prior day, Wednesday, September 13th, we'll be hosting a tour of our Stickney facility, which is in the Chicago area. I sincerely hope that you'll be able to join me and our senior management team for one or hopefully both of these events. We will, of course, closely monitor health and safety guidelines as appropriate. The management presentation portion of our investor day will also be available virtually with a live webcast. For those who will be attending the management presentation virtually, you'll have the opportunity to participate in real time in the question and answer session following the presentation. If you're not able to attend either in person or virtually, we will provide a replay of the webcast on our website following the conclusion of the event. Now let's review some of the headlines from our first quarter. We have a lot of exciting activities to report today that reinforce our work to strengthen our unique vertically integrated business models serving key infrastructure markets. We continue to make great progress in expanding our business by enhancing our comprehensive product portfolio, further penetrating certain geographic markets, entering new markets, and gaining market share. In addition, our work in optimizing our operating and logistics network not only reduces costs by making us more efficient, but opens up new business opportunities. We attribute this to the quality of products and services we provide while adhering to the strictest standards of safety and sustainability expected from our customer base. Now let's begin with a closer look at key metrics for Q1 on slide five. Consolidated sales of $513 million, the first quarter record increased by 54 million or 12% compared with 459 million in the prior year. Excluding an $8 million unfavorable impact from foreign currency changes, Sales increased by $62 million, or 13%. In addition, we generated adjusted EBITDA of $61.5 million, another first quarter record, compared with the prior year quarter of $52.6 million in EBITDA. Adjusted EBITDA margin was 12%, about a half percent higher than the 11.5% margin we generated in the first quarter of last year. First quarter diluted earnings per share were $1.19, a record first quarter, compared with $0.87 in the prior year quarter. Adjusted earnings per share were $1.12, compared with $0.91 for the prior year quarter. During the quarter, we used $15.3 million of cash in operations, a typical first quarter pattern for coppers as our business ramps up and we're building working capital heading into the second quarter. We deployed $37 million of cash in the first quarter, with $30 million going to capital expenditures, a little over $1 million to dividends, and just under $6 million to share repurchases. Later, I will highlight where we are gaining traction on our path to $300 million in adjusted EBITDA in 2025, along with potential opportunities and challenges ahead. Next, I'd like to provide an overview of the progress made regarding our Zero Harm 2.0 platform. Slide 7 shows that 35 out of our 45 operating facilities worked accident-free in the first quarter, along with a significant 30% reduction in recordable injuries. The acceleration of our Zero Harm 2.0 implementation continues throughout our organization in a number of ways, and re-energizes the engagement among our frontline employees. We have been actively hosting in-person zero harm safety training events and currently are focusing on the team members in our utility and industrial products business as their original sessions took place virtually due to COVID related protocols for the past several years. So far, approximately half of those managers have been trained on the initial module foundations and observations in the first quarter. And to date, more than half of all manufacturing employees have been trained in conducting peer-to-peer safety observations, and by the end of 2023, all of our frontline manufacturing employees will have completed peer-to-peer observations. We believe that colleagues who care about each other's safety is a powerful factor in the zero-harm culture, and peer-to-peer observations reinforce that mindset. As a result, our leading activities have increased by 14%, which helped to decrease serious safety incidents by 60% from the prior year. Also, we continue to work on our safety, health, and environmental management information system to improve overall user satisfaction, which includes using a single shared dashboard to measure our progress on key metrics. Furthermore, we are introducing toolbox talks in small groups at our facilities, which encourage more discussion and idea generation around personal safety. In April, we focused on emphasizing our life-saving rule of protect yourself while working at heights, in order to keep zero harm at a practical, relatable level for our frontline teams. As always, the safety and well-being of our employees and our communities remains the core principle of the zero harm culture at Coppers. Our teams worldwide deserve credit for staying focused on safety and for generating the impressive results as seen in the first quarter. Now I'll turn the discussion over to our Chief Financial Officer, Jimmy Sue Smith.