Koppers Holdings narrows FY24 adjusted EPS to $4.25-$4.45 from $4.10-$4.60

Lowers FY24 revenue view to $2.10B from $2.15. Consensus is for FY24 EPS $4.16 and for revenue $2.18B. After considering the current competitive environment, global economic conditions, as well as the ongoing uncertainty associated with geopolitical and supply chain challenges, Koppers lowered its FY24 revenue view to $2.1B, compared with sales of $2.15B in 2023. As a result, adjusted EBITDA is anticipated to be approximately $270M-$275M in 2024, including the acquisition of Brown Wood which closed on April 1, compared with $256.4M in 2023. Sees effective tax rate for adjusted net income 28%, consistent with the adjusted tax rate in 2023. Koppers now expects operating cash flows of approximately $100M-$125, excluding any impact from pension termination. The company is pursuing a termination of its U.S. qualified pension plan and is targeting this effort for completion in the Q1. An estimated $25M of funding will be required when this is completed, which will impact operating cash flow in 2025. Koppers continues to anticipate capital expenditures of approximately $80M, including capitalized interest but excluding acquisitions, with approximately $20M allocated to discretionary projects. Commenting on the forecast, Ball said, “As 2024 winds down, I am gratified by our team’s resilience in the face of adversity. To be posting new highs across a number of important metrics in a challenging market environment is a testament to our grit and determination. Looking beyond this year, I believe we remain on track for continued growth in profitability and free cash flow, despite an intensely competitive environment. To ensure that improvement, during the fourth quarter, we will begin taking measures to streamline our organization to support an increasingly cost-conscious customer base. I believe these actions will help to extend our decade-long growth in profitability and support a higher margin profile by leveraging a smaller global team highly focused on serving customer preferences.”