Koppers Holdings Inc.

Good morning, ladies and gentlemen. Thank you for standing by, and welcome to the Copper's second quarter 2024 earnings conference call and webcast. At this time, all participants are in a listen-only mode. If you need assistance, please alert 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 this event is being recorded. I would now like to turn the conference over to Ms. Quinn McGuire. Please go ahead, ma'am.

Thanks and good morning. I'm Quinn McGuire, Vice President of Investor Relations. Welcome to our second quarter of 2024 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 have 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 has been broadcast live on our website And a recording of this call will be available on our website for replay through November 8, 2024. At this time, I would like to direct your attention to our forward-looking disclosure statement seen on slide two. Comments, 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 today to certain non-GAAP financial measures. The press release, which is available on our website, also contains reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures. Joining me for our call today are Leroy Ball, Chief Executive Officer of Coppers, and Jimmy Sue Smith, Chief Financial Officer. I'll now turn the call over to Leroy.

Thank you, Quinn. Good morning, everyone, from beautiful Denmark. The COPPERS team finds ourselves doing this call from the city of Nyborg in Denmark, which is the site of one of our three strategically situated carbon material and chemicals plants, and where we recently conducted our board meeting, which included visiting our plant and spending time with our employees at the site. We have a great team in Europe, led by Christian Nielsen and Dr. Steve Krimp. Christian and his team were able to show our board the recently commissioned enhanced carbon products plant that will enable us to improve our throughput of higher value carbon products, while also opening up new and exciting market opportunities. In addition, Steve and his team were also able to show off the new European Performance Chemicals lab and pilot plant and review our opportunities for growing the PC business in Europe. It was a very productive week, and my thanks go out to the entire team here in Europe for their hospitality and engagement. Now, as Quinn mentioned, joining me on this call today, as usual, is our CFO, Jimmy Sue Smith. But I also have our President and Chief Operating Officer, Jim Sullivan, who will be joining Jimmy, Sue, and I for the question and answer session. I'm pleased to share the results of our very successful second quarter coming on the heels of our prior report that outlined some of the early challenges that we were facing in 2024. Now, while some of those market challenges still persist, we dove headfirst into focusing on the things that we could control with cost being the largest element. The result was a new high in quarterly EBITDA and hopefully renewed confidence from the market that we remain on track to meeting our near-term goals for 2024 and 2025. So as a start, let's begin on slide four by looking at some of our key metrics for the quarter. Consolidated sales were $563.2 million, which was off by $14 million compared with $577.2 in the prior year quarter. Now, we added a modest amount of sales during the quarter from our BrownWood acquisition, some of which were offset by PC chemical sales to Brown being classified now as intercompany, and also lower pricing and volume in the CM&C business, which drove the consolidated sales comparison lower. Now, even on lower sales, we were able to generate adjusted EBITDA of 77.5 million, a new high compared with 70.3 million in the prior year. Adjusted EBITDA margin was 13.8% versus 12.2% in the prior year. 13.8% represents our quarterly high margin mark since quarter two of 2021 and is a meaningful improvement over where we've been tracking. Second quarter diluted earnings per share was $1.25 compared with $1.15 in the prior year quarter, while adjusted earnings per share for the quarter were $1.36 compared with $1.26 in the prior year quarter. Q2 also represented a strong cash flow quarter as operating cash flow doubled our Q2 2023 number. The Copper's team has done a nice job over the past 18 months of understanding the connection and power of turning earnings into cash and continues to make it a focus of their everyday work. All three business segments showed significant sequential improvement in the second quarter, pushing consolidated results to new heights. Performance chemicals deliver the most improvement as demand for our residential wood treatment preservatives continue to be resilient despite some unfavorable industry trends. In addition, cost reduction measures across the board help to offset current market conditions and keep us on track for a strong 2024. Now let's take a look at our continuing zero harm efforts on slide six. Zero harm 2.0 remains our primary focus, re-energizing engagement at the front line of operations to accelerate our progress towards zero incidents. For the first half of 2024, 28 out of 47 facilities worldwide performed accident-free. We have two business units right here in Europe, our CM&C and Performance Chemicals businesses, that had zero recordables year-to-date. Compared to the prior year, leading activities year-to-date through June 30th have experienced a 2% decline, while our recordable injury rate was lowered by 6%, and serious safety incidents improved by 22%. Now, we're encouraged by these metrics, and we give credit to our team members worldwide. As always, we'll continue to strengthen our zero-harm culture through focusing on the health and safety of our people. Now, with an overview of second quarter financials, is our Chief Financial Officer, Jimmy Sue Smith.